Hype or Hope - How To Separate Hype From Real Innovation

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Chief Strategy Officer Summit - NYC - 12 Dec 2012

We have all heard how this year will be the year of mobile/ecommerce/digital/social/etc. We constantly hear about how some technology will dramatically disrupt our business.

The reality is that many innovations are surrounded by hype. As strategists, our role is to sort through the noise to uncover nuggets of insight that lead to cogent strategies and measurable results. How do we identify hype? How do we evaluate tech maturity? How do we rationalize investments into unknown technologies? This presentation
will share some informative cases and present a pithy approach for assessing, selecting, and exploiting innovation.

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Hype or Hope - How To Separate Hype From Real Innovation

  1. 1. Chief Strategy Officer Summit New York Hype or Hope? HOW TO SEPARATE HYPE FROM REAL INNOVATION ILIYA RYBCHIN Bloomberg LP 6 December 2012 @rybchin
  2. 2. INTRODUCTION Have you heard this phrase recently? 2013 is the year of mobile! | ILIYA RYBCHIN 2
  3. 3. INTRODUCTION Perhaps you heard this phrase 2013 is the year of … Convergence | ILIYA RYBCHIN 3
  4. 4. INTRODUCTION Before moving forward let’s define innovation and dispel myths DICTIONARY DEFINITION: in-no-va-tion (noun) 1.  The introduction of something new 2.  A new idea, method, or device MY DEFINITION: 1.  Change that has meaningful business consequences; new business, service, or product concepts that have positive financial impact Common Myths: §  New Technology = Innovation §  Innovation comes from luck and circumstances and not from a repeatable process §  There are definitive answers to whether something is really innovative 2.  New ideas that fundamentally change the basis of competition within the industry | ILIYA RYBCHIN 4
  5. 5. INTRODUCTION Opposing views can be equally valid and correct Social Media is… … the intersection of excess spare time and excess narcissism. | ILIYA RYBCHIN … a powerful and costeffective new way for companies to engage with customers. 5
  6. 6. 1 Manage up 2 Stay ahead of the hype 3 Have an opinion 4 Change your opinion 5 INTRODUCTION To help navigate the ocean of hype, I have 5 pithy rules Act instead of admire | ILIYA RYBCHIN 6
  7. 7. 1 Manage up 2 Stay ahead of the hype 3 Have an opinion 4 Change your opinion 5 Act instead of admire | ILIYA RYBCHIN 7
  8. 8. MANAGE Hype is a virulent disease that needs to be actively managed §  Managing up will help “inoculate” your organization from hype §  Senior management may form opinions with limited information, limited context, and rely on questionable advisors UP §  Media, pundits, consultants, academics, and other assorted “experts” should not be allowed to set the innovation agenda for your company Why is this important? §  CEOs should not learn about innovation from strangers §  Too much wasted time, energy, & effort – without tangible progress §  Distraction from competing alternative that actually do move the business forward | ILIYA RYBCHIN 8
  9. 9. Examples (illustrative) 1.  Establish credibility (not expertise) §  Vendor/VC Summits Regular events where Vendors & VCs assemble to present roadmaps, products & ideas 2.  Manage the information flow §  “Frightening Fridays” Standing lunch meeting where a potentially disruptive startup is invited to present to the company 3.  Communicate 4.  Communicate more 5.  Communicate much more UP What should you do? §  Newsletters Regular newsletter highlighting innovation, R&D, VC activity, and opportunities for the company §  Think Tanks Focused brainstorming workshops with internal (and possibly external) subject matter experts §  Expert Panels Standing meetings with key the company stakeholders to review pipeline & sourcing activities | ILIYA RYBCHIN MANAGE Create a managed fire hose of information 9
  10. 10. 1 Manage up 2 Stay ahead of the hype 3 Have an opinion 4 Change your opinion 5 Act instead of admire | ILIYA RYBCHIN 10
  11. 11. STAY Time to discuss innovation is different from time to act Gartner Hype Cycle Negative media begins Act Initial in-market products Initial media coverage Early stage startups Prototypes R&D Discuss OF Expectations AHEAD Positive media hype peak THE HYPE Time Why is this important? §  The earlier you identify potential innovations, the more time you have to assess, discuss, debate, prototype, market test, and discuss… on your terms and your timeline §  Potential for disruptive impact and defensible advantage erode quickly as you progress down the Hype Cycle | ILIYA RYBCHIN 11
  12. 12. Examples (illustrative) 1.  Allocate time/staff Innovation Radar -dedicated staff -volunteers AHEAD What should you do? STAY Develop an “Innovation Scouting & Analysis” capability 2.  Generate innovation hypothesis OF THE 3.  Build a network and establish critical external relationships HYPE §  Centralized web-based hub for innovation scouting & analysis §  Plotted Maturity vs. Strategic Importance with visualization for revenue potential, momentum, and ability to leverage §  Organized, companies, relevant projects, news, key employees, and supporting docs §  3 person team (2 scouts, 1 editor) | ILIYA RYBCHIN 12
  13. 13. STAY Innovation Radar: A closer look AHEAD OF THE HYPE | ILIYA RYBCHIN 13
  14. 14. 1 Manage up 2 Stay ahead of the hype 3 Have an opinion 4 Change your opinion 5 Act instead of admire | ILIYA RYBCHIN 14
  15. 15. HAVE Even a wrong opinion is better than no opinion §  The mere act of forming an opinion asks key questions, challenges assumptions, and pushes leaders to think strategically OPINION §  The absence of an opinion creates a void that allows the hype virus to incubate §  If you reach a decision early enough on the hype curve, you will have plenty of time to re-evaluate, refine, and adjust your decision §  As you progress further down the hype curve, urgency & risk increase dramatically §  Sometimes telegraphing a decision to your competitors can be beneficial §  Establishing a position early allows you to shape the direction | ILIYA RYBCHIN AN §  An opinion (based on facts) forms the starting point for a structured discussion 15
  16. 16. 1.  Learn enough about the innovation to answer critical questions (no need to be an expert) Strategic fit 2.  Make assumptions that will fill in knowledge gaps How well does the concept fit with current company strategic themes and business imperatives? How well does the concept align Customer with needs/wants of customers fit and their willingness to pay? Brand fit 3.  Explore the contrarian view to stress test the assumptions 4.  Reach a conclusion and disseminate it broadly in the organization Is the concept brand appropriate”, easy to communicate, and newsworthy? Real factor How real is the concept, i.e., what evidence do we have of demonstrated market success? Impact How significant is the concept s impact on financial and other key business metrics Does the concept fit within Feasibility existing technical, geographic, or operational constraints? | ILIYA RYBCHIN 16 OPINION Examples (illustrative) AN What should you do? HAVE A simple evaluation framework enables rapid opinion making
  17. 17. 1 Manage up 2 Stay ahead of the hype 3 Have an opinion 4 Change your opinion 5 Act instead of admire | ILIYA RYBCHIN 17
  18. 18. Prepare to be flexible, open minded, and humble CHANGE Innovation is an ego-less endeavor YOUR No opinion survives first contact with… §  …colleagues §  …executives §  …customers §  …partners §  …consultants §  ….time OPINION Why is this important? §  Just because it’s a good business doesn’t mean it’s any of your business §  The market evolves faster than your ability to adequately analyze it §  The probability of being wrong increases exponentially as you compound assumptions | ILIYA RYBCHIN 18
  19. 19. WebOS OPINION 3 iOS Growth potential of user base Interest level among advertisers Android Size of existing user base 2 RIM YOUR 1 Windows CHANGE Example: Selecting operating systems on which to develop Low High Re-Evaluation Point | ILIYA RYBCHIN 19
  20. 20. 1 Manage up 2 Stay ahead of the hype 3 Have an opinion 4 Change your opinion 5 Act instead of admire | ILIYA RYBCHIN 20
  21. 21. ACT Hype well executed is better than hope poorly managed §  Brilliant PowerPoints alone do not advance the business INSTEAD §  Common reasons for innovation failure: §  Launching too early §  Giving up too soon §  Launching too late Insufficient analysis will not be the reason the innovation fails OF §  Hanging on too long ADMIRE Why is this important? §  Nothing creates analysis paralysis like the hype virus §  Well executed “experiments” are cheaper than the opportunity costs of sitting still §  The disruptive startup that may threaten your business does not need months of analysis and dozens of meeting to invest $50,000 in a new product | ILIYA RYBCHIN 21
  22. 22. lifestyle publications retail visits call center visits market research market conferences trends concepts customer business desirability viability strategic plan competitors technical feasibility business publications customer desirability prototypes business viability technical feasibility operational requirements features lists products & services customer business desirability viability technical feasibility technical requirements ADMIRE inspiration workshops internal groups initiatives business model OF living lab concept brief user scenarios academic research technology trends corporate research Generate hypothesis Source innovations What do we believe about our markets and customers? | ILIYA RYBCHIN Qualify innovations Which opportunities are most attractive? Build business case What contribution does it make to our business? Develop go-to market plan How do we get the initiative to market? INSTEAD social trends ACT A repeatable process is the only true test for innovation Launch/manage products & services Is the initiative meeting or exceeding expectations? 22
  23. 23. 1 CONCLUSION Conclusion Manage up These rules are just a starting 2 Stay ahead of the hype point… ultimately every organization must discover their 3 Have an opinion 4 Change your opinion 5 Act instead of admire | ILIYA RYBCHIN own approach to proactively uncovering, evaluating, discussing, and acting on potential innovations 23
  24. 24. I L I Y A THANK YOU Thank you R Y B C H I N i r y b c h i n @ b l o o m b e r g . n e t @ r y b c h i n | ILIYA RYBCHIN 24

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