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Don’t Risk Innovation: De-Risk It
- 1. Don’t Risk Innovation: De-Risk It PRANAV BADHWAR
- 2. WHY INNOVATE? AVOID COMMODIFICATION RISK AND INCREASE MARGINS SHAPE INDUSTRY - SET THE NEW NORMAL, GAIN MIND AND MARKET SHARE BEFORE COMPETITORS LEVERAGE TECHNOLOGY SHIFTS TO GENERATE NEW REVENUE AND UPSELL EXISTING CUSTOMERS EVOLVING TRENDS AND EMERGING TECHNOLOGIES CREATE OPPORTUNITY, WHILE COMMODIFICATION CREATES RISK
- 3. COMMODIFICATION RISK COMPETITIVE MARKETS PRESSURE MARGINS – MAINTAINING THE STATUS QUO IS NOT A SOLUTION
- 4. COMMODIFICATION RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk COMPETITIVE MARKETS PRESSURE MARGINS – MAINTAINING THE STATUS QUO IS NOT A SOLUTION
- 5. COMMODIFICATION RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk Margin Risk COMPETITIVE MARKETS PRESSURE MARGINS – MAINTAINING THE STATUS QUO IS NOT A SOLUTION CORE BUSINESS MODEL
- 6. COMMODIFICATION RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk Margin Risk COMPETITIVE MARKETS PRESSURE MARGINS – MAINTAINING THE STATUS QUO IS NOT A SOLUTION CORE BUSINESS MODEL DEATH SPIRAL • Profits decline due to increased competition • Lower cash flow and reduced stock price hurts ability to raise capital and invest in business • Insufficient investment reduces profits further
- 7. BUSINESS MODEL RISK EXECUTION RISK GROWS AS A COMPANY INNOVATES AWAY FROM ITS CORE BUSINESS
- 8. BUSINESS MODEL RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk EXECUTION RISK GROWS AS A COMPANY INNOVATES AWAY FROM ITS CORE BUSINESS
- 9. BUSINESS MODEL RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk EXECUTION RISK GROWS AS A COMPANY INNOVATES AWAY FROM ITS CORE BUSINESS CORE BUSINESS - CURRENT MODEL
- 10. BUSINESS MODEL RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk EXECUTION RISK GROWS AS A COMPANY INNOVATES AWAY FROM ITS CORE BUSINESS EVOLVED BUSINESS MODEL • Related customer value proposition • Incremental business process changes • Related customer technologies • Related skill-sets - modest investments in training personnel, revised HR policies • Modified IT systems - modest investments in system changes CORE BUSINESS - CURRENT MODEL
- 11. BUSINESS MODEL RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk EXECUTION RISK GROWS AS A COMPANY INNOVATES AWAY FROM ITS CORE BUSINESS Execution Risk EVOLVED BUSINESS MODEL • Related customer value proposition • Incremental business process changes • Related customer technologies • Related skill-sets - modest investments in training personnel, revised HR policies • Modified IT systems - modest investments in system changes CORE BUSINESS - CURRENT MODEL NEW BUSINESS MODEL • New customer value proposition • New business processes • New customer technologies • New skill-sets - major investments in hiring, new HR policies • New IT systems – major investments in new or upgraded systems
- 12. BUSINESS MODEL RISK CUSTOMERS EXISTING NEWRELATEDEXISTING ENTERPRISE / TECHNICAL CAPABILITIES RELATED NEW Higher risk Higher risk EXECUTION RISK GROWS AS A COMPANY INNOVATES AWAY FROM ITS CORE BUSINESS Execution Risk EVOLVED BUSINESS MODEL • Related customer value proposition • Incremental business process changes • Related customer technologies • Related skill-sets - modest investments in training personnel, revised HR policies • Modified IT systems - modest investments in system changes CORE BUSINESS - CURRENT MODEL NEW BUSINESS MODEL • New customer value proposition • New business processes • New customer technologies • New skill-sets - major investments in hiring, new HR policies • New IT systems – major investments in new or upgraded systems “Startups have a 90% failure rate…” – Fortune Magazine, Driven in the Valley: The Startup Founders Fueling GM’s Future, Sep. 22, 2016
- 13. WHAT’S A POOR CAPITALIST TO DO?! RISK IF YOU DO INNOVATE, RISK IF YOU DON’T Execution Risk Margin Risk
- 14. BALANCE RISK AND BANISH FEAR
- 15. BALANCE RISK AND BANISH FEAR THE FOUR FOUNDATIONS OF SUCCESSFUL CORPORATE INNOVATION
- 16. BALANCE RISK AND BANISH FEAR Margin risk Execution Risk LOW-RISK BENEFITS AGILITY EXECUTION CUSTOMER-FOCUSED INVESTMENT-GRADE STRATEGY INNOVATION FAIL FAST & OFTEN, DISCOVER & SUCCEED BIG THE FOUR FOUNDATIONS OF SUCCESSFUL CORPORATE INNOVATION INNOVATION AGILITY ALIGNMENT
- 17. CUSTOMER-FOCUSED, INVESTMENT- GRADE STRATEGY BUILD A CORPORATE INNOVATION PROGRAM FOR SUCCESS • Target high return opportunities • Offer meaningful customer differentiation • Exploit adjacencies and ensure business fit
- 18. CUSTOMER-FOCUSED, INVESTMENT- GRADE STRATEGY INNOVATION BUILD A CORPORATE INNOVATION PROGRAM FOR SUCCESS • Target high return opportunities • Offer meaningful customer differentiation • Exploit adjacencies and ensure business fit • Blue Ocean Strategy • Jobs To Be Done • Co-creation • User interviews • Brainstorming • Process re-engineering
- 19. AGILITY CUSTOMER-FOCUSED, INVESTMENT- GRADE STRATEGY INNOVATION BUILD A CORPORATE INNOVATION PROGRAM FOR SUCCESS • Target high return opportunities • Offer meaningful customer differentiation • Exploit adjacencies and ensure business fit • Blue Ocean Strategy • Jobs To Be Done • Co-creation • User interviews • Brainstorming • Process re-engineering • Minimally Viable Product/ Solution • Dogfooding • Multi-Generation Project Plan • Lean • Critical path
- 20. AGILITY ALIGNMENT CUSTOMER-FOCUSED, INVESTMENT- GRADE STRATEGY INNOVATION BUILD A CORPORATE INNOVATION PROGRAM FOR SUCCESS • Target high return opportunities • Offer meaningful customer differentiation • Exploit adjacencies and ensure business fit • Blue Ocean Strategy • Jobs To Be Done • Co-creation • User interviews • Brainstorming • Process re-engineering • Minimally Viable Product/ Solution • Dogfooding • Multi-Generation Project Plan • Lean • Critical path • Leadership support • Balanced Scorecard • Aligned organization • New skills hiring • Scaled investment
- 21. AGILITY ALIGNMENT CUSTOMER-FOCUSED, INVESTMENT- GRADE STRATEGY INNOVATION COMING NEXT: DETAILS OF THE FOUR FOUNDATIONS INNOVATION BENEFITS BUILD A CORPORATE INNOVATION PROGRAM FOR SUCCESS • Target high return opportunities • Offer meaningful customer differentiation • Exploit adjacencies and ensure business fit • Blue Ocean Strategy • Jobs To Be Done • Co-creation • User interviews • Brainstorming • Process re-engineering • Minimally Viable Product/ Solution • Dogfooding • Multi-Generation Project Plan • Lean • Critical path • Leadership support • Balanced Scorecard • Aligned organization • New skills hiring • Scaled investment
Editor's Notes
- E.G. IOT, DATA SCIENCE, ARTIFICIAL REALITY, DRONES, AUTONOMOUS VEHICLES