Strategic Innovation ODWS Budapest Aug 2010
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Strategic Innovation ODWS Budapest Aug 2010

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The presentation from my workshop at the Organizational Development World Summit in Budapest in August 2010. The presentation outlines some theory on business model innovation and how it has been ...

The presentation from my workshop at the Organizational Development World Summit in Budapest in August 2010. The presentation outlines some theory on business model innovation and how it has been driven in a company using "The Future Space", a large group event as a central element.

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Strategic Innovation ODWS Budapest Aug 2010 Strategic Innovation ODWS Budapest Aug 2010 Presentation Transcript

  • © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • $ 1.600.000,- © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • Free Download © Marc Sniukas - Doujak Corporate Development
  • Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Strategic Innovation in Theory & Practice.
  • AGENDA What are we going to do today? Introduction Why does Strategic Innovation matter? Some Theory (just a little bit) What is Strategic Innovation? In Practice How to make it happen? © Marc Sniukas - Doujak Corporate Development
  • AGENDA Who’s this guy? © Marc Sniukas - Doujak Corporate Development
  • AGENDA Who’s this guy? © Marc Sniukas - Doujak Corporate Development
  • AGENDA Who’s this guy? © Marc Sniukas - Doujak Corporate Development
  • AGENDA Who’s this guy? © Marc Sniukas - Doujak Corporate Development
  • AGENDA Who’s this guy? Strategy Change Management Global Development Transformation Local Implementation Cultural Change Hard Cuts + New Growths Leadership Innovation & Growth Leadership Team Performance Reinventing Existing Businesses Management Team Buildign Creating New Businesses Building Innovation Capabilities © Marc Sniukas - Doujak Corporate Development
  • AGENDA Who’s this guy? © Marc Sniukas - Doujak Corporate Development
  • AGENDA Why Strategic Innovation? © Marc Sniukas - Doujak Corporate Development
  • It all started with criticism of strategic management. Content • Too much focus on best practices, operational effectiveness and incremental improvements in cost and quality • Too much imitation of competitors‘ moves • Too much holding on to one strategic position • Operational effectiveness is NOT strategy •  „Herding“, clustering of companys around the most successful one Process • Strategy as incremental adaptation of last year‘s plan (no search for new opportunities, differentiation, and new growth. • Planning being too formal and analytical • No creativity • The assumption of linearity of the process Tools • Tools being too analytical • Focus on control • Tools were developed for a different purpose (analysis, planning and control) • Conventional tools provide a snapshot of conventional wisdom • „No battle plan survives contact with the enemy.“ General Collin Powell © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • „Innovation is front and center on the corporate agenda, according to a global survey. Executives are adding more breakthrough innovations and business model changes to their portfolio to fuel the growth engine.“ Business Week, November 16, 2009
  • © Marc Sniukas - Doujak Corporate Development
  • AGENDA What is Strategic Innovation? © Marc Sniukas - Doujak Corporate Development
  • Please discuss with your neighbours (groups of 3) • What is „strategic innovation“ to you? 2 minutes © Marc Sniukas - Doujak Corporate Development
  • AGENDA What is Strategic Innovation? © Marc Sniukas - Doujak Corporate Development
  • 4 Types of Innovation Internal Operational Management Innovation Innovation Continuous Discontinuous Product & Service Strategic Innovation Innovation External © Marc Sniukas - Doujak Corporate Development
  • Strategic Innovation is about growth Growth Organic growth Mergers & Acquisitions Within the Strategic boundaries of the current business Innovation Same or increased Increased market market share in share in mature growing markets markets © Marc Sniukas - Doujak Corporate Development
  • „There„s no good just being better, ...you got to be different.“ Charles Handy
  • “Hey! They‟re lighting their arrows! Can they do that?” © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New / Increased Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation © Marc Sniukas - Doujak Corporate Development
  • Achieving growth and/or differentiation through... New Markets New Value New Business Models Who What How is your customer? Which do you offer your customers? do you create your value customer segments do you Products, services, solutions, proposition? How do you serve? experiences. reach the customer? How do What problem do you solve for you make money? them? Market Innovation Value Innovation Business Model Innovation Superior & Sustainable Financial Performance © Marc Sniukas - Doujak Corporate Development
  • AGENDA OK…but how to make it happen? Theoretically... ...in practice! © Marc Sniukas - Doujak Corporate Development
  • The Purpose – Why do it? • Simply the Best Operationalisation of the mission statement. • Common Understanding Development of common language. • Be One Step Ahead Increase competencies to improve existing business models. • Growth Targets Generating ideas for new businesses. • Create the Future Benefit from strategic competencies of the 2nd and 3rd level. © Marc Sniukas - Doujak Corporate Development
  • The Purpose – Why do it? Energy & Solar & Woods & Technical Surfaces Sports Decoratives Components © Marc Sniukas - Doujak Corporate Development
  • The Process Setting the Stage A Discovery-Driven Approach © Marc Sniukas - Doujak Corporate Development
  • • Define the purpose, scope and focus of innovation activities The Process • Mobilize the organization • Align business and innovation strategies • Build leadership alignment & commitment • Build a common language and understanding • Identifying internal • Definition of governance structures and processes and external • Definition of metrics opportunities • Sensing, seeking Setting the Stage and shaping opportunities • Bringing successful ideas to market • Describe the • Financial impact current business model • Incubation • Explore and • Acceleration understand • Transition A Discovery-Driven consumer and customer needs, Approach motivations, behaviors • Understand emerging markets, industry and socio- ecological trends • Turn ideas into market ready concepts • Road-test the idea portfolio with key stakeholders, consumers, internal and external • Prototyping, Technical feasibility • Develop and select ideas • Experimentation & learning • Develop an idea portfolio • Customer & stakeholder feedback • Idea Generation (In-house, cross-units, external) • Business planning, venturing, secure founding • Idea Evaluation • Decide of organizational and governance structures • Idea Selection • Evolution & optimization • Strategic decision making © Marc Sniukas - Doujak Corporate Development
  • The Future Space © Marc Sniukas - Doujak Corporate Development
  • A process and large group event for... Setting the Stage A Discovery-Driven Approach © Marc Sniukas - Doujak Corporate Development
  • May 6-7 The Overall Process April 15 Group Mgmt March 10 Meeting BU Workshop Mgmt Division Mgmt Meetings • Presentation of Business Division • Introduction to Models Mgmt Business Model • Preparation of Innovation GMM Group • Introduction Future Space Research on Final version 2010 • Process innovative Business until April 29 to • Preparation Models and Trends. SIO Group 2011 + Business Draft until March 29 to SIO Model Description Coaching Sessions with SIO by Division Mgmt Final Version until April 7 to SIO and their teams. © Marc Sniukas - Doujak Corporate Development
  • The Future Space 3 steps © Marc Sniukas - Doujak Corporate Development
  • 1. Description 2. Inspiration 3. Creation © Marc Sniukas - Doujak Corporate Development
  • Step 1 Description © Marc Sniukas - Doujak Corporate Development
  • Our past. Our present. © Marc Sniukas - Doujak Corporate Development
  • How your organization became what it is today… • What was the original idea of the founders? • What where the main life changing events in your company’s history? (e.g. internationalization, crisis,…) • What was the focus of the phases between? (e.g. growth, innovation, integration,…) • What where the main challenges in the respective phases and how did your organization master them? • What are the main strengths and mastered challenges you can build your future on? • What are 2-3 milestones for the future? © Marc Sniukas - Doujak Corporate Development
  • The Process • Please form mixed groups of 3 people and B discuss the path of life of your Business Unit. A C A-B-C Interviews • A interviews B; C observes & gives feedback • B interviews C; A observes & gives feedback • C interviews A; B observes & gives feedback • Please summarize the main points of your discussion. Total Time = 60’ 3x 15’ interview + 5’ feedback © Marc Sniukas - Doujak Corporate Development
  • 1 Discussion in the business unit groups on 1. Path of life of the business unit Main insights from the A-B-C group discussion. 2 2. Current business model Discussion of the main key success factors of the model including the Economic Engine. © Marc Sniukas - Doujak Corporate Development
  • Business model exhibition • Please choose a business model that you are interested to find out more about • After 15 minutes when you hear the signal, please change to the next business model booth. • In total there will be 3 rounds of Business Model presentations & discussions. © Marc Sniukas - Doujak Corporate Development
  • Step 2 Inspiration © Marc Sniukas - Doujak Corporate Development
  • Looking outside © Marc Sniukas - Doujak Corporate Development
  • 1. Please take your scenario card from your booklet and study it for a couple of minutes. 2. Find a partner 3. Discuss with your partner: • What could it mean for our • Future if my, your or both trends come true? 4. Please change partner and discuss the two trends again.
  • © Marc Sniukas - Doujak Corporate Development
  • KEY KEY VALUE RELATIONSHIPS CUSTOMERS PARTNERS ACTIVITIES PROPOSITION KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS © Marc Sniukas - Doujak Corporate Development
  • Traditional Approach Strategic Innovation Who • People who want a quick bite to eat • People who want to sit down and • Get in, order, get served quickly, get remain seated for a while out quickly again • Create a “3rd place” à la Starbucks What • Pre-made food prepared constantly • Coffee and cake according to demand • Made to order (coffee) • Standard menus • Pre-produced (cakes) • Some variations allowed How • 1 counter • 2 counters • Standardized processes • Separate seating area for McCafé • Central locations with high • Key is to increase share of wallet frequencies of the customer and keep him for • The key is to serve a maximum a longer period of time in the number of people during a given restaurant time • Innovative use of existing assets. © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • KEY KEY VALUE RELATIONSHIPS CUSTOMERS PARTNERS ACTIVITIES PROPOSITION KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • Traditional Approach Strategic Innovation Who • Kids • Everybody from 4-99 • Hard Core Gamers • The whole family • Casual Gamers What • High Tech – High Performance • Family Console Console • Low tech console • Focus on fun rather than technical performance How • High tech, high end processors for • Low tech, lower power processors, speed and graphics, connect over the no additional features internet, additional features (DVD, • New movement technology internet,...)  lower cost  high cost  lower sales price (190.- €)  high sales price (250-300.- €) © Marc Sniukas - Doujak Corporate Development
  • 1 Perspective 2020 • How will our environment develop? • What are relevant trends for us? • What will be coming up in the future and what will be the implications? 2 • Discussion of innovative business model examples
  • Step 3 Creation © Marc Sniukas - Doujak Corporate Development
  • Developing ideas © Marc Sniukas - Doujak Corporate Development
  • Method cards WHO WHAT HOW
  • WHO #1 Challenge industry assumptions #11 Target non-customers #12 Target less profitable customers WHAT #13 Target the least satisfied customers #2 Offer complementary products and services #14 Target the chain of buyers #3 Offer solutions and experiences #15 Segment according to commonalities #4 Offer bundles #16 Segment according to circumstances #5 Switch your appeal: functional versus #17 Desegment the customer based emotional HOW #6 Focus on the job to be done #18 Reinvent the customer interface (channels) #7 Selectively eliminate, reduce, raise and create #19 Reinvent your customer relationships #8 Look at subsitutes #20 Invent new revenue streams #9 Expand the use of your assets and capabilities #21 Price differently #10 Look at the customer experience #22 Reinvent you cost base #23 Re-assess your key activities #24 Collaborate with suppliers, partners, the network and ecosystem #25 Look at completely different industries © Marc Sniukas - Doujak Corporate Development
  • KEY KEY VALUE RELATIONSHIPS CUSTOMERS PARTNERS ACTIVITIES PROPOSITION #24 Re-assess your #10 Offer #3 Target non- key activities complementary #13 Switch your customers products and appeal: functional #2 Look at services #4 Target less #25 Collaborate with versus emotional completely different profitable suppliers, partners, industries #11 Offer solutions #20 Reinvent your customers the network and and experiences customer ecosystem relationships #5 Target the #12 Offer bundles least satisfied #14 Focus on the job customers to be done KEY #6 Target the RESOURCES #15 Selectively CHANNELS chain of buyers eliminate, reduce, #7 Segment raise and create #17 Expand the use according to #16 Look at commonalities of your assets and #17 Expand the use substitutes capabilities #8 Segment of your assets and #17 Expand the use according to capabilities #18 Look at the of your assets and circumstances customer experience capabilities #19 Reinvent the #9 Desegment the #18 Look at the customer based customer interface customer experience (channels) COST CENTRES REVENUE STREAMS #23 Reinvent your #21 Invent new revenue streams cost base #22 Price differently
  • Group work in the Business Units • Based on the insights you gained, please develop ideas for new business models • The ideas can be - Cross functional ideas - Ideas for new business models - Social business ideas - Ideas for your own business unit • Please note them on post its • Please choose ONE most promising idea • Please write them on post its and stick them on the canvas • Chose the “Most Promising Idea” Time: 60’
  • Business model exhibition • Free floating and discussing of the ideas developed by the business units. Time: 60’ © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • After the Future Space 1.Ideas were clustered and further described. 2.Project Teams were set up to evaluate the details of group wide ideas. 3.Division and Business Unit ideas went straight into the strategy & budgeting process for the following year. © Marc Sniukas - Doujak Corporate Development
  • Area Rating Description What we know... What we assume... Strategy How well does the idea fit with our current 0 5 10 strategy? What is the strategic  expanding or defending a current purpose of the idea? business  building a new one that has already been identified  laying the foundations for potential new businesses Organization Resources & Competencies Which do we need? Which do exist already? Which need to be build? Change need Change readiness Finance Revenue potential Financial (Qty x Price) Implications Cost (fix + variable) Unit Margin Target Cash Flow Payoffs in the Payback  near <1 yr  medium <3 yrs  long term > 3 yrs Net Present Value © Marc Sniukas - Doujak Corporate Development
  • Innovation How innovative is the WHO Potential for new model?  Known to company and industry disruption (Technology/Value  Known to industry, new to Proposition, Market, company Supply Chain)  New for company and industry WHAT  Known to company and industry  Known to industry, new to company  New for company and industry HOW  Known to company and industry  Known to industry, new to company  New for company and industry Key risk Competition low mid high factors Weaknesses Threaths Expected blocks / hurdels to implementation Key success Strengths factors Opportunities Next steps First experiment © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • KEY KEY VALUE RELATIONSHIPS CUSTOMERS PARTNERS ACTIVITIES PROPOSITION KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • © Marc Sniukas - Doujak Corporate Development
  • www.nin.com © Marc Sniukas - Doujak Corporate Development
  • Want more? www.doujak.eu www.sniukas.com © Marc Sniukas - Doujak Corporate Development
  • Further references © Marc Sniukas - Doujak Corporate Development
  • Would you like to participate? • Dynamic Capabilities (i.e. activities, processes and routines) through which Business Model Innovations come about. • Managerial capabilities for creating, developing and leading these capabilities. © Marc Sniukas - Doujak Corporate Development
  • “The difficulty lies not in the new ideas,... …but in escaping from the old ones.” John Maynard Keynes © Marc Sniukas - Doujak Corporate Development
  • Looking forward to seeing you again...
  • Contact Details Marc Sniukas Doujak Corporate Development Lainzer Strasse 80 A-1130 Vienna Mobile: +43 699 122 333 marc.sniukas@doujak.eu © Marc Sniukas - Doujak Corporate Development
  • Lainzer Strasse 80 A-1130 Vienna Austria Tel: +43.1.306 33 66 Fax: +43.1.306 33 66 9 office@doujak.eu www.doujak.eu