Berkeley Method of Innovation Leadership. A method and language to adapt, do new things, change culture, match strategy, set innovation mindset and psychology.

1. INNOVATION AND LEADERSHIP
IKHLAQ SIDHU
Faculty Director and Founder
Sutardja Center for Entrepreneurship & Technology
IEOR Emerging Area Professor
Department of Industrial Engineering & Operations Research, UC
Berkeley

2. Welcome to the
Sutardja Center for Entrepreneurship & Technology
College of Engineering, UC Berkeley

3. What is happens
at the Sutardja Center (SCET)?
• We are changing education
• Our students change the world
• Our lab area enable new industries

4. Our Model Brings Bay Area Executives and Entrepreneurs into the Classroom
1500 Undergraduates
100 Ph.D / Graduate Students
100 Executives
10 Global Partners
Michael Marks, KKR, former CEO, Flextronics
Shomt Ghose, Venture Partner, Onset Ventures
Udi Manber, VP Engineering, Google
Marc Andreesen, Founder, Netscape
Larry Baer, COO, San Francisco Giants
Amine Haoui, CEO, Sensys Networks
Stacey Lawson, Founder In Part, Executive Seibel
Jim Davidson, Managing Director, Silverlake Partners
Donna Dubinsky, Former CEO, Palm
Matt Caspari, co-founder, Aurora Biofuels
Richard Gorman, SVP, Siebel Systems
Mike Olson, founder and CEO, Cloudera
Brodie Keast, EVP, TiVo
David Ladd, Managing Director, Mayfield
Jeff Miller, CEO, Documentum
Eva Miranda, SVP, Sony Corporation
Ravi Mohan, Managing Director, Shasta Ventures
Ted Hoff, Inventor,of the Microprocessor
Nat Goldhaber, Managing Director, Claremont Creek Ventures
Peter Thiel, co-founder and CEO, PayPal
Victoria Hale, founder and CEO, Medicines 360
Steve Newcomb, founder , Powerset (part of Microsoft’s BING)
Pehong Cheng, CEO, Broadvision

5. LOTS OF
ACTIVITY
CHALLENGE
LAB
GLOBAL
PROFESSORS
NZTV
SELF-DRIVING
COLLIDER
DATA-X CHATBOT COLLIDER SCET IN TAIWAN
JOHN BATTELLE
FOUNDER WIRED
MAGAZINE
NEWS
COVERAGE

6. OUR APPROACH

7. Misconception: We used to think that learning business
and management would help technology innovators
Reading business
cases studies on
innovation
Management
practices and
financial statements
Making a
presentation to
raise funds
Studying
business
frameworks
Making a
business
plan
Waiting
for a great
idea
6 things are not the main ingredient to deploy
innovation or start ventures.

8. Our model has
adapted: Business
training is not the
only key element
Our effectiveness formula is:
• Depth in an valued area
• Entrepreneurial “behaviors
and mindset”
Our programs and projects
provide this.
Our model has
adapted: Business
training is not the only
key element
Skill in a
Core Area
Innovation Behaviors and Mindset
“Psychology of Innovation”
High
Potential
Too
Narrow
Street smart, but
lacking depth

9. Our model has
adapted: Business
training is not the
only key element
• Wide comfort zone
• Generate trust
• Good connectors
• Inductive learning:
experiments and reflection
• Self awareness and
emotional intelligence
What are the
behaviors and
mindsets?
Skill in a
Core Area
Innovation Behaviors and Mindset
“Psychology of Innovation”
High
Potential
Too
Narrow
Street smart, but
lacking depth
Taught in situation, during the journey

10. TOPIC 1:
INNOVATION AND
LEADERSHIP

11. Some companies have been
able to adapt and transform
while others were not
Technical Drivers:
• Data
• Algorithms
• Robotics
• Network Connectivity
Structural Drivers:
• Business Model Adaptation
• Shorter Cycles
Adapted
Disrupted

12. Some companies have been
able to adapt and transform
while others were not
Technical Drivers:
• Data
• Algorithms
• Robotics
• Network Connectivity
Structural Drivers:
• Business Model Adaptation
• Shorter Cycles
Adapted
Disrupted
• Did “they” get it. Culture, external awareness, learning
behaviors.
• Did “they” get it. Alignment: Top vs Middle
• Timing: over-compensate vs denial
• Have alignment, but cannot execute (tactical)
• Have alignment, but have challenges with Acquisitions

13. What Allows a Firm to Adapt
Innovation Leadership 3 Leadership sets
culture
Culture for operations and/or Innovation 2 Culture supports
tactics
Story /
Adaptation
Ecosystem
Operational
Innovation
Financial Innovation
or Diversity
with filters
1 Tactics and process:
Everyday activities
Three Layers That Effect Innovation
in an Existing Organization

14. Innovation Journeys
Experimentation
Adaptation / Pivots
Learning
Searching
Working
Business
Model
Scale
Operations
Measures
Executing
Disruption

15. Early stage projects
have more unknown
variables.
Early stage = higher
risk and higher
expected reward.
Searching Phase Scaling Phase
The best people in each phase
of innovation are different
Characteristics of People
in the Search Phase
Characteristics of People
in the Scaling Phase
Skills
Experimentation, adaptation,
learning customer + technology
Scale, operations,
measures, accounting
Motivation Change the world Don’t deviate from a working process
Characteristics Comfortable with unknowns Likes plans, avoid unknowns

16. Suppose you are trying to create something new.
What can go wrong?
Can’t tell the story in
a way that people
can understand
1 Did not get support of
stakeholder (internal or
external ecosystem)
2 Not strategic to the
company - or not the
right time for this project
- but the innovator does
not understand why
3 HR / finance can’t
or don’t know
how to help
4
The team that creates
does not want to
operationalize, need
transition team
5 Culture or
organization does not
support or allow
6 Incentive structure:
does not support
change?
7

17. What Allows a Firm to Adapt
Innovation Leadership 3 Leadership sets
culture
Culture for operations and/or Innovation 2 Culture supports
tactics
Story /
Adaptation
Ecosystem
Operational
Innovation
Financial Innovation
or Diversity
with filters
1 Tactics and process:
Everyday activities
Three Layers That Effect Innovation
in an Existing Organization

18. KEY CONCEPT AND
TACTICS FOR CREATING
ANYTHING THAT IS NEW

19. The Path to New Initiatives and New Businesses
T
S
Progress on
Technology and/or
Product
Social Progress in Developing Stakeholder Ecosystem

20. Technology
Readiness
Level
Developed by NASA

21. Investment
Readiness
Level
Version: Berkeley Method
Adapted from Steve Blank

22. Identify
the Stage
of Your
Product
Business Investment Readiness
System Test,
Launch, Ops
Technical Readiness
System/Subsystem
Demonstration
Development Progress
Feasibility
Research
Insight Story /
Value
Validatio
n
Business
Model
Sales
Process
Complete
Ecosystem
Operational
Metrics
X
Y
Z

23. What is the path for
transformation or
business model change?
Adding, Letting Go, and
Change Management
Dimension B
Dimension A
X
Z
Company or
Project: Today
Company or
Project: Next

24. 1. What do you need to acquire
or learn?
2. What do you need to let go?
3. First principle: you can’t be
happy where you are.
4. It’s like getting a new degree
part time, while you still work
at the last job.
Dimension B
Dimension A
Z
Company or
Project: Today
Company or
Project: Next
X

25. Strategic transformation
and value creation
Purpose Process
People
Technical progress and
social progress
Behavior and culture
Transformative Projects:
Purpose and Process
• Stage of project H1 - H3
• Match the team
• Story value
• Steps and behaviors
• Scale, measures, PM
People
• Leadership and culture
• Psychology of innovation and
personal development
Strategic issues:
• Top down vs bottom up
• SWOT & disrupt yourself
• Filtering for core competence
Language

26. EARLY STAGE TACTICS
FOR CREATING ANYTHING
THAT IS NEW

27. New (Transformative Projects)
always start with a story which
must be tested for resonance
External world
is changing
Background of
team
Stories
at work
Story/Pitch
Prototype
Validation
Execution and Traction
Operative insight:
background + change
Lean discovery:
MVP
Story is important for 2 reasons:
1. Alignment and feedback
2. Scale and stakeholders
Story types:
• NABC
• I observed —
• A transformed with B

28. Validation requires talking with customers,
listening, and critical thinking
Need information:
1. Is the need real
2. Does the solution actually solve the problem
3. Typically “sell before you build” to test
commitment, and its cheaper
Story/Pitch
Prototype
Validation

29. Who Takes Risk
Advisors
Suppliers
Employers
Investor / Management
Customers
News Media
Service Providers
Partner Firms

30. Who Takes Risk
Advisors
Suppliers
Employers
Investor / Management
Customers
News Media
Service Providers
Partner Firms

31. Who Takes Risk
Advisors
Suppliers
Employers
Investor / Management
Customers
News Media
Service Providers
Partner Firms
Considerations:
1. Validation
2. Testing commitment
• Your view
• Their view
3. Self awareness
4. Your role: conduit of
information

32. KEY CONCEPTS IN
INNOVATION STRATEGY

33. V S
S W O T Disrupt Yourself

34. OKR
OKR
OKR
20% 80%
ORDERCHAOS
Innovation
Process Example:
Google Model
Organic
Integration
• Engineers experiment with self
selected projects
• Contents in transparent internal
database
• Managers can not stifle
innovation
• Objectives + key results:
- Top down meets bottom up
- Transparent skunk works
- Quarterly

35. Strategic Consideration:
How far can you get from your core competence
Working Business Model
Option 1: Very different business, low synergy (must compete on its own)
Option 2: Build on core competencies - adds to existing company story

36. Core
Competency
Scale 10x? Hard to Copy Option A Option B Option C
Inventory Selection
Customer Service
Information
Management
Full Price on Internet
Logistics
Culture
SAMPLE
WORKSHEET

37. Strategic transformation
and value creation
Purpose Process
People
Technical progress and
social progress
Behavior and culture
Transformative Projects:
Purpose and Process
• Stage of project H1 - H3
• Match the team
• Story value
• Steps and behaviors
• Scale, measures, PM
People
• Leadership and culture
• Psychology of innovation and
personal development
Strategic issues:
• Top down vs bottom up
• SWOT & disrupt yourself
• Filtering for core competence
Language

38. End of Section

39. Open / Acceleration Trend

40. Open Source Trend
Projects
Inside
the
Company

41. Regional and Corporate Incubators Trend
Corporate and Public
Accelerators
AT&T Foundry
Coca-Cola Bridge

42. Evolution of Corporate Incubation and Acceleration
• No Money
• ATT: Inside problems
• Coke: Branding and
Connections to
suppliers/customers
• Big Lifts: Spotify, Call Drops,
Video Bills
• Rewards to firms:
• More happy customers,
• Better product/services,
• and maybe a few $$$
Spac
e
Mon
ey
Corporate
Synergy

43. Model 1
Roadmap
Driven
Model 4
Full-On Corp
Research
Model 2
Transition
Look
Ahead
Model 3
Full
Integration
Model 5
M&A Driven or Open
Model 6
Intrinsic Needs
Driven
Industry
Leadership Role
Balanced
Focus
External /
Open Focus
Less Risk, More
Predicable
New: Adv. R&D is Blending into Corporate
Incubation
New Models for Advanced R&D and Open Incubation for today's Modern Companies

44. Evolution of Corporate Incubation and Acceleration
Space Money
Corporate Synergy
• No Money
• ATT: Inside problems
• Coke: Branding and
Connections to
suppliers/customers
• Big Lifts: Spotify, Call Drops,
Video Bills
• Rewards to firms:
• More happy customers,
• Better product/services,
• and maybe a few $$$
Spac
e
Mon
ey
Corporate
Synergy
Main Incubation/Acceleration Discussion Topics:
Internal Incubation:
• License to innovate
• Scope – where do you want it, or at least do they know what is strategic
• Slides do not equal success
External / Open Innovation:
• Concept = put some effort into letting the world now what you want
• NIH is a major cultural problem (use incentives to fix it)
• Mismatch problems:
You: What can you offer, what time frame
You: What do you want: scanning, licensing, acquisitions. What size is relevant?
Venture: What do they expect: access, network, investment,
Venture: What timeframe?

45. KEY CONCEPTS IN
LEADERSHIP AND
PSYCHOLOGY

46. Two Cities in USA
• San Diego
48
•Chicago

47. The Berkeley Method emphasizes mindset & behaviors
A holistic, journey-based approach to entrepreneurship and innovation
Fair NegotiationCommunication
Services
Mentors
Advisors
Rules of
Engagement
Ecosystems
Opportunity
MVP
Raising
Funds
Business
Models
Case Study
Sales
Process
Mindset & BehaviorsFramew
orks
Network
s

48. Insecure Leadership
Kills Innovation
Trust Enables
Innovation
&

49. Leadership in the Context
of Innovation is Different
• Managing (at the edge of) chaos
• Best ideas are not from the leader
• Bottom up ideas meet top down objectives
• Transparency, flatness, data driven
• Tolerance for diverse ideas
• Organization and people must learn and adapt
Where is the balance?
Protect the brand and history vs
Intent the new story

50. Mindsets for Motivation

51. Mindset and Adversity
?
Adversity is
an Advantage
Adversity is
Dis-advantage

52. Mindset and Adversity
Promotes
“desire to accomplish”
Adversity is
an Advantage
Adversity is
Dis-advantage
Promotes
“entitlement”

53. A Thought:
Are there other
ways to invoke
motivation in
a person?

54. Mindset for Learning

55. An Example Mindset:
Fixed vs Growth Mindset
Fixed Mindset is a belief that your intelligence is fixed.
It is your identity (ie I am naturally smart or good at X):
This mindset amplifies a FEAR of losing your identifying label.
As in “What will people say?” if I can’t do this?
Carol Dweck

56. Fixed and Growth Mindset
• Fixed Mindset Behaviors:
Stay within Comfort Zone. Don’t take any chances. Don’t experiment or learn.
Your brain is actually switched “off”. Take failures too hard.
• Growth Mindset Behaviors:
Always learning, wide comfort zone, open to experiments and some risk,
embrace challenges, can learn from failures.
K-12
Learning
Over a
Year
Growth
Fixed
Dweck

57. Psychology: There are many positive mindsets and
good behaviors that encourage innovation
Broad vs
Narrow Thinking
Fixed vs
Growth
Scarcity vs
Abundance
Seeking Truth vs
Being Right
Healing Teams vs
Dividing People
Rebellion vs
Compliance
Saying what no one
else wants to say
Accretive
Collaboration
Adversity is
advantage
Listening,
not just hearing
Expanding
comfort zone
Not hoarding
information
Comfort with “no” Self awareness Diversity value Generating trust

58. What is the path for
transformation or
business model change?
Adding, Letting Go, and
Change Management
Dimension B
Dimension A
X
Z
Company or
Project: Today
Company or
Project: Next
How much alignment do you have?
Do you have the right behaviors?

59. A Question to Psychology Department Collaborators:
Which of the BMoE Behaviors can be measured in Psychology?

60. Company or
Organization
X-Ray to Understand
Input vs
Output
Investment
R&D
Returns
Understand
People & Functions
Data Analytics
We can now
see and
understand
at the
level of people
Berkeley Innovation Index

61. Mindset Score Components

62. Total Score
Mean 7.04
St. Dev 0.94
Mean 7.8
St. Dev 1.0

63. HighLow
Innovation culture
Operationalfocus
Low High
Berkeley innovation index
Operational focus vs. innovation culture
Participants

64. Your Results and
Why It Matters

65. Organizational Scoring
www.inno-quant.com
Your organizations’ score 17
Your innovation score is
4.3
Your operations score is
3.9
Your total score is
16.7
0
1
2
3
4
5
0 1 2 3 4 5
Innovation Mindset Score
Operations
Mindset
Score

66. 3. Results: Sample Summary Workgroup
Your innovation culture
score is
3.0
Your operational focus
score is
2.7
Your total score is
8.1
Workgroup Scores for
William Demant
68

67. 3. Results: Sample Summary Innovation Mindset
Innovation Mindset
(BII Score)
7.6
Summary
▪ All scores are fairly high with
medium spread
▪ The lowest scores (with high
spread) is Comfort Zone, with one
outlier
69

68. 4. Perceived Strengths
Summary of perceived strengths
Subset of answers to the Question: “What you feel we do best?”
● Agree on common direction and activities
● Come up with great ideas from engineering level.
Take the right decisions in time.
● Long-term thinking
● Understanding the issue of hearing impairment and
innovate around it
● Commercializing innovation
● Improving people life by innovation
● Quality in products - stay loyal to our core
competences
Word Cloud
70

69. 4. Areas for Change
Summary of perceived strengths
Subset of answers to the Question: “What are the most important areas for us to improve?”
● Alignment on common vision and culture
● Efficient go to market process btb and btc
● Creating a stronger shared culture of embracing
change, innovation, customer satisfaction
● Be more focused in our priorities
● Being more willing to take a first move in bringing
new product concepts to the market
Understanding "buying customer" vs. end-user
needs
Word Cloud
71

70. What is the path for
transformation or
business model change?
Adding, Letting Go, and
Change Management
Dimension B
Dimension A
X
Z
Company or
Project: Today
Company or
Project: Next
How much alignment do you have?
Do you have the right behaviors?

71. Our model has
adapted: Business
training is not the
only key element
Organizational Profiles
Hiring for Employees
Selection of Leaders
Operations Mindset:
• Does what they are told
• Easy to manage
• Accepts that its not my business
• Needs upfront clarity on task
• Avoids risk
• Accepts conventional wisdom
Innovation Mindset:
• Asks why, needs context
• Hard to manage
• Easily bored
• Questions hierarchy/boundaries
• Minds everyone’s business
• Accepts risk, OK with ambiguity
• Eager to take on complexity
Operations
Mindset
Innovation
Mindset
Reference: Nir Merry, Applied Materials

72. Our model has
adapted: Business
training is not the
only key element
Organizational Profiles
Hiring for Employees
Selection of Leaders
Operations Mindset:
• Does what they are told
• Easy to manage
• Accepts that its not my business
• Needs upfront clarity on task
• Avoids risk
• Accepts conventional wisdom
Innovation Mindset:
• Asks why, needs context
• Hard to manage
• Easily bored
• Questions hierarchy/boundaries
• Minds everyone’s business
• Accepts risk, OK with ambiguity
• Eager to take on complexity
Operations
Mindset
Innovation
Mindset
Reference: Nir Merry, Applied Materials

73. 2 Ways to Change Behaviors
Change
underlying
belief and
mindset
Fake it until
you make it

74. END OF SECTION