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Organizational Dynamics of Innovation
C. Todd Lombardo
Chief Design Strategist - Fresh Tilled Soil
Adjunct Professor - IE ...
For Sale:
Socks. Three.
Different colors.
A $5M Idea?
A $25M Idea??
Why not Zara? H&M?
Every major corporation in the 21st
century is dealing with issues of disruption.
Steve Blank,
8-TIME ENTREPRENEUR, AUTHOR...
differentmeasureofperformance
time
performance
time
new market disruption
compete against nonconsumption
low end disruptio...
disruptive
innovations
low-end
disruptions
new-market
disruptions
SSD Hard Drives
JetBlue / EasyJet
Zipcar
AirBnB
Case Studies
Formula…?
Formula…?
○ Raise some venture backing: $16M >> $41M
Formula…?
○ Raise some venture backing: $16M >> $41M
○ Hire the best engineers you can find
Formula…?
○ Raise some venture backing: $16M >> $41M
○ Hire the best engineers you can find
○ Give them space (a 22,000 ft2)
Formula…?
○ Raise some venture backing: $16M >> $41M
○ Hire the best engineers you can find
○ Give them space (a 22,000 ft2...
H4 H3
Innovation Emerging Scaling Operating
Problem/Solution Product/Market Efficiency
(core)
H2 H1
Scale
H4 H3 H2 H1
Product
Development
Innovation
Services
Startup
Accelerator
DESIGN SPRINTS, WORKSHOPS, EVENTS
FIVE EXTERNAL ST...
CORETODAY
NEWFUTURE
CORETODAY
NEWFUTURE
Organizational Factors
WHAT’S IT LIKE AT YOU COMPANY?
1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030
Source: XPLANE
1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030
Source: XPLANE
Peak of II
Industrial
Revolution
Slavery
Average
manufacturing
had less than
4 employees
Average lifespan
of S&P500 is
67 years
Pay by performance
Capital ...
Slavery
Average
manufacturing
had less than
4 employees
US Steel has
$1B market
capitalization
Pay by performance
Capital ...
Slavery
Average
manufacturing
had less than
4 employees
US Steel has
$1B market
capitalization
Pay by performance
Capital ...
Slavery
Average
manufacturing
had less than
4 employees
US Steel has
$1B market
capitalization
Pay by performance
Capital ...
Slavery
Average
manufacturing
had less than
4 employees
US Steel has
$1B market
capitalization
Pay by performance
Capital ...
1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030
1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030
Traditional Organizations from the 20th Century
1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030
Traditional Organizations from the 20th Century
Orga...
1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030
Traditional Organizations from the 20th Century
Orga...
Traditional Organizations More Conscious Organizations Modern Organizations
THREE ORG TYPES
Source: XPLANE
Traditional ORG - The “Pyramid”
Source: XPLANE
Rigid Organizations
○ No formal innovation framework
○ Innovation initiatives untied to company strategy
○ Siloed
○ Misali...
Conscious ORG - The “Family”
Source: XPLANE
Modern ORG - The “Organism”
Source: XPLANE
An Evolution?
Pyramid Family Organism
Source: XPLANE
20TH TO 21ST CENTURY ORG MODELS
Change
Source: XPLANE
20TH TO 21ST CENTURY ORG MODELS
Change
Source: XPLANE
CORETODAY
NEWFUTURE
Allocation of Resources
MONEY WHERE YOUR MOUTH IS?
Twenty percent of our new products are
now required to be driven by innovation.
CHIEF STRATEGY OFFICER, FORTUNE 500 COMPANY
Twenty percent of our new products are
now required to be driven by innovation.
CHIEF STRATEGY OFFICER, FORTUNE 500 COMPAN...
Twenty percent of our new products are
now required to be driven by innovation.
CHIEF STRATEGY OFFICER, FORTUNE 500 COMPAN...
Source: Innovation LeaderTotal exceeds 100% as many respondents cited more than one reason.
Source: Innovation Leader
Total exceeds 100% as many respondents cited more than one reason.
Valuing Design
DO YOU, REALLY?
Design leads to innovation and innovation
demands design.
Indra Nooyi
CEO, PEPSICO
Source: UK Design Council
Creative Tension
BRUTALLY HONEST
What tools are you using?
21ST CENTURY TOOLS FOR 21ST CENTURY PROBLEMS
Source: STRATEGYZER
Product Roadmapping
VISION OBJECTIVES PRIORITIZE ROADMAP
USER 

GOALS
SOLUTIONS
THEMES
Programmatic Factors
INNOVATION PROGRAMS?
WHAT CAN WE DO?
Top-down sponsorship and bottom-up
effort is essential to make meaningful
culture transformation progress.
Dane Howard
DIR...
}
}
}
DESIGN SPRINT
INTERVALS
AGILE SCRUM
Define
Understand
Build
Test
Ideate
WEEK 1
Refine
Build
Test
WEEK 2
Refine
Build...
Individual Factors
HOW DO YOU THINK?
You have 3 sheets of paper
Build the Tallest Tower
In 3 minutes
Challenge
00:03:00
00:02:30
00:02:00
00:01:30
00:01:00
00:00:30
00:00:00
Designtist
(DESIGNER + SCIENTIST)
DESIGNER SCIENTIST
EMPATHIC
MAKER
FORWARD LOOKING
RIGOROUS
EXPERIMENTAL
HYPOTHESIS DRIVEN
Focus on a
Human
Problem
Focus on the “job”
NOT THE TECH, NOR THE PRODUCT
People Business
Technology
SCIENTIFIC
METHOD
DESIGN
PROCESS
AGILE
PHILOSOPHY
design
sprint
http://designsprintbook.com
OPPORTUNITY
IDENTIFICATION
PROJECT
ACCEPTANCE
V0.1 V0.2 V0.3 LAUNCH
OPPORTUNITY
IDENTIFICATION
PROJECT
ACCEPTANCE
INVENTOR
V0.1 V0.2 V0.3 LAUNCH
TECHNICAL
CREATIVITY
OPPORTUNITY
IDENTIFICATION
PROJECT
ACCEPTANCE
INVENTOR CHAMPION
V0.1 V0.2 V0.3 LAUNCH
TECHNICAL
CREATIVITY
POLITICAL
SAVVY
OPPORTUNITY
IDENTIFICATION
PROJECT
ACCEPTANCE
INVENTOR CHAMPION IMPLEMENTER
V0.1 V0.2 V0.3 LAUNCH
TECHNICAL
CREATIVITY
POL...
OPPORTUNITY
IDENTIFICATION
PROJECT
ACCEPTANCE
INVENTOR CHAMPION IMPLEMENTER
V0.1 V0.2 V0.3 LAUNCH
TECHNICAL
CREATIVITY
POL...
MAKE
PEOPLE
WANT
THINGS
MAKE
THINGS
PEOPLE
WANT
MAKE
PEOPLE
WANT
THINGS
Tension Brutal Honesty. Mixed Viewpoints.
Tension Brutal Honesty. Mixed Viewpoints.
Agility Quickly change. Learn fast.
Tension Brutal Honesty. Mixed Viewpoints.
Agility Quickly change. Learn fast.
Space Experiment. Fail. Collaborate.
Tension Brutal Honesty. Mixed Viewpoints.
Agility Quickly change. Learn fast.
Space Experiment. Fail. Collaborate.
Mindset...
C. Todd Lombardo
@iamctodd
freshtilledsoil.com
http://bit.ly/mce2016
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
MCE^3 - C. Todd Lombardo -  Organizational Dynamics of Innovation
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MCE^3 - C. Todd Lombardo - Organizational Dynamics of Innovation

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It is not the strongest that survives, rather the most adaptable. What structural, behavioral, cultural, and organizational factors play into a company's success in producing hit product after hit product? Examining both successful and unsuccessful examples, this talk presents a framework for teams to set themselves up for repeated innovation success

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MCE^3 - C. Todd Lombardo - Organizational Dynamics of Innovation

  1. 1. Organizational Dynamics of Innovation C. Todd Lombardo Chief Design Strategist - Fresh Tilled Soil Adjunct Professor - IE Business School @iamctodd
  2. 2. For Sale: Socks. Three. Different colors.
  3. 3. A $5M Idea?
  4. 4. A $25M Idea??
  5. 5. Why not Zara? H&M?
  6. 6. Every major corporation in the 21st century is dealing with issues of disruption. Steve Blank, 8-TIME ENTREPRENEUR, AUTHOR, STARTUP GURU
  7. 7. differentmeasureofperformance time performance time new market disruption compete against nonconsumption low end disruption adressing overserved customers with a low cost business model sustaining technology bringing a better product into an established market most demanding customers least demanding customers
  8. 8. disruptive innovations low-end disruptions new-market disruptions SSD Hard Drives JetBlue / EasyJet Zipcar AirBnB
  9. 9. Case Studies
  10. 10. Formula…?
  11. 11. Formula…? ○ Raise some venture backing: $16M >> $41M
  12. 12. Formula…? ○ Raise some venture backing: $16M >> $41M ○ Hire the best engineers you can find
  13. 13. Formula…? ○ Raise some venture backing: $16M >> $41M ○ Hire the best engineers you can find ○ Give them space (a 22,000 ft2)
  14. 14. Formula…? ○ Raise some venture backing: $16M >> $41M ○ Hire the best engineers you can find ○ Give them space (a 22,000 ft2) ○ Pray they make something valuable
  15. 15. H4 H3 Innovation Emerging Scaling Operating Problem/Solution Product/Market Efficiency (core) H2 H1 Scale
  16. 16. H4 H3 H2 H1 Product Development Innovation Services Startup Accelerator DESIGN SPRINTS, WORKSHOPS, EVENTS FIVE EXTERNAL STARTUPS
  17. 17. CORETODAY NEWFUTURE
  18. 18. CORETODAY NEWFUTURE
  19. 19. Organizational Factors WHAT’S IT LIKE AT YOU COMPANY?
  20. 20. 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Source: XPLANE
  21. 21. 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Source: XPLANE Peak of II Industrial Revolution
  22. 22. Slavery Average manufacturing had less than 4 employees Average lifespan of S&P500 is 67 years Pay by performance Capital budgeting Task design Divisionalization Brand management Women couldn’t vote Management 1.0 90% of people were in agriculture Ford makes 500K cars/yr Social segregation Colonialism No environmental care Communism No Google No Airbnb 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 US Steel has $1B market capitalization Source: XPLANE Peak of II Industrial Revolution
  23. 23. Slavery Average manufacturing had less than 4 employees US Steel has $1B market capitalization Pay by performance Capital budgeting Task design Divisionalization Brand management Women couldn’t vote Management 1.0 90% of people were in agriculture Ford makes 500K cars/yr Social segregation Colonialism No environmental care Communism No Google No Airbnb Peak of II Industrial Revolution 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Source: XPLANE
  24. 24. Slavery Average manufacturing had less than 4 employees US Steel has $1B market capitalization Pay by performance Capital budgeting Task design Divisionalization Brand management Women couldn’t vote Management 1.0 90% of people were in agriculture Ford makes 500K cars/yr Social segregation Colonialism No environmental care Communism No Google No Airbnb Peak of II Industrial Revolution 2ND Innovation Consultants 3RD Venture Design Human-Centered Co-Creation Ethnography Customer Journey 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Rise of Design for Innovation Source: XPLANE 1ST Digital change agents
  25. 25. Slavery Average manufacturing had less than 4 employees US Steel has $1B market capitalization Pay by performance Capital budgeting Task design Divisionalization Brand management Women couldn’t vote Management 1.0 90% of people were in agriculture Ford makes 500K cars/yr Social segregation Colonialism No environmental care Communism No Google No Airbnb Peak of II Industrial Revolution 2ND Innovation Consultants 3RD Venture Design Human-Centered Co-Creation Ethnography Customer Journey 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Rise of Design for Innovation Source: XPLANE 1ST Digital change agents
  26. 26. Slavery Average manufacturing had less than 4 employees US Steel has $1B market capitalization Pay by performance Capital budgeting Task design Divisionalization Brand management Women couldn’t vote Management 1.0 90% of people were in agriculture Ford makes 500K cars/yr Social segregation Colonialism No environmental care Communism No Google No Airbnb Peak of II Industrial Revolution 2ND Innovation Consultants 3RD Venture Design Human-Centered Co-Creation Ethnography Customer Journey 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Rise of Design for Innovation Source: XPLANE Average lifespan of S&P500 is 67 years Average lifespan of S&P500 is 15 years 1ST Digital change agents
  27. 27. 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030
  28. 28. 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Traditional Organizations from the 20th Century
  29. 29. 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Traditional Organizations from the 20th Century Organizations with a more conscious approach
  30. 30. 1850 1890 1900 1915 1940 1960 1970 1985 1995 2005 2015 2020 2025 2030 Traditional Organizations from the 20th Century Organizations with a more conscious approach Modern Organizations from the 21st Century
  31. 31. Traditional Organizations More Conscious Organizations Modern Organizations THREE ORG TYPES Source: XPLANE
  32. 32. Traditional ORG - The “Pyramid” Source: XPLANE
  33. 33. Rigid Organizations ○ No formal innovation framework ○ Innovation initiatives untied to company strategy ○ Siloed ○ Misaligned metrics
  34. 34. Conscious ORG - The “Family” Source: XPLANE
  35. 35. Modern ORG - The “Organism” Source: XPLANE
  36. 36. An Evolution? Pyramid Family Organism Source: XPLANE
  37. 37. 20TH TO 21ST CENTURY ORG MODELS Change Source: XPLANE
  38. 38. 20TH TO 21ST CENTURY ORG MODELS Change Source: XPLANE
  39. 39. CORETODAY NEWFUTURE
  40. 40. Allocation of Resources MONEY WHERE YOUR MOUTH IS?
  41. 41. Twenty percent of our new products are now required to be driven by innovation. CHIEF STRATEGY OFFICER, FORTUNE 500 COMPANY
  42. 42. Twenty percent of our new products are now required to be driven by innovation. CHIEF STRATEGY OFFICER, FORTUNE 500 COMPANY Do you set aside 20% of your company’s time & resources??
  43. 43. Twenty percent of our new products are now required to be driven by innovation. CHIEF STRATEGY OFFICER, FORTUNE 500 COMPANY Do you set aside 20% of your company’s time & resources?? ME
  44. 44. Source: Innovation LeaderTotal exceeds 100% as many respondents cited more than one reason.
  45. 45. Source: Innovation Leader Total exceeds 100% as many respondents cited more than one reason.
  46. 46. Valuing Design DO YOU, REALLY?
  47. 47. Design leads to innovation and innovation demands design. Indra Nooyi CEO, PEPSICO
  48. 48. Source: UK Design Council
  49. 49. Creative Tension BRUTALLY HONEST
  50. 50. What tools are you using? 21ST CENTURY TOOLS FOR 21ST CENTURY PROBLEMS
  51. 51. Source: STRATEGYZER
  52. 52. Product Roadmapping VISION OBJECTIVES PRIORITIZE ROADMAP USER 
 GOALS SOLUTIONS THEMES
  53. 53. Programmatic Factors INNOVATION PROGRAMS? WHAT CAN WE DO?
  54. 54. Top-down sponsorship and bottom-up effort is essential to make meaningful culture transformation progress. Dane Howard DIRECTOR OF USER EXPERIENCE, EBAY
  55. 55. } } } DESIGN SPRINT INTERVALS AGILE SCRUM Define Understand Build Test Ideate WEEK 1 Refine Build Test WEEK 2 Refine Build Test WEEK 3 Refine Build Test WEEK 4 Refine Build Test WEEK n
  56. 56. Individual Factors HOW DO YOU THINK?
  57. 57. You have 3 sheets of paper Build the Tallest Tower In 3 minutes Challenge
  58. 58. 00:03:00
  59. 59. 00:02:30
  60. 60. 00:02:00
  61. 61. 00:01:30
  62. 62. 00:01:00
  63. 63. 00:00:30
  64. 64. 00:00:00
  65. 65. Designtist (DESIGNER + SCIENTIST)
  66. 66. DESIGNER SCIENTIST EMPATHIC MAKER FORWARD LOOKING RIGOROUS EXPERIMENTAL HYPOTHESIS DRIVEN
  67. 67. Focus on a Human Problem
  68. 68. Focus on the “job” NOT THE TECH, NOR THE PRODUCT
  69. 69. People Business Technology
  70. 70. SCIENTIFIC METHOD DESIGN PROCESS AGILE PHILOSOPHY design sprint
  71. 71. http://designsprintbook.com
  72. 72. OPPORTUNITY IDENTIFICATION PROJECT ACCEPTANCE V0.1 V0.2 V0.3 LAUNCH
  73. 73. OPPORTUNITY IDENTIFICATION PROJECT ACCEPTANCE INVENTOR V0.1 V0.2 V0.3 LAUNCH TECHNICAL CREATIVITY
  74. 74. OPPORTUNITY IDENTIFICATION PROJECT ACCEPTANCE INVENTOR CHAMPION V0.1 V0.2 V0.3 LAUNCH TECHNICAL CREATIVITY POLITICAL SAVVY
  75. 75. OPPORTUNITY IDENTIFICATION PROJECT ACCEPTANCE INVENTOR CHAMPION IMPLEMENTER V0.1 V0.2 V0.3 LAUNCH TECHNICAL CREATIVITY POLITICAL SAVVY PROJECT MANAGEMENT
  76. 76. OPPORTUNITY IDENTIFICATION PROJECT ACCEPTANCE INVENTOR CHAMPION IMPLEMENTER V0.1 V0.2 V0.3 LAUNCH TECHNICAL CREATIVITY POLITICAL SAVVY PROJECT MANAGEMENT SERIAL INNOVATOR
  77. 77. MAKE PEOPLE WANT THINGS
  78. 78. MAKE THINGS PEOPLE WANT MAKE PEOPLE WANT THINGS
  79. 79. Tension Brutal Honesty. Mixed Viewpoints.
  80. 80. Tension Brutal Honesty. Mixed Viewpoints. Agility Quickly change. Learn fast.
  81. 81. Tension Brutal Honesty. Mixed Viewpoints. Agility Quickly change. Learn fast. Space Experiment. Fail. Collaborate.
  82. 82. Tension Brutal Honesty. Mixed Viewpoints. Agility Quickly change. Learn fast. Space Experiment. Fail. Collaborate. Mindset Designer + Scientist. FOCUS ON PEOPLE PROBLEMS
  83. 83. C. Todd Lombardo @iamctodd freshtilledsoil.com http://bit.ly/mce2016

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