How to Thrive in an Era of Constant Change
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Explore the most promising new technologies and organizational structures you should employ in any size organization to encourage constant innovation. This presentation, addresses how and what small- and medium-sized businesses can learn from big innovation labs. E-commerce leaders Mike Ward of Thrift Books and Oscar Castro, formerly of Big Lots, offer some of the innovation principles that big companies use and how to adapt them to work in your organization. Presentation from Retail's Digital Summit 2016.
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How to Thrive in an Era of Constant Change
- 2. In this session you will learn: § Innovate at any size company § Approach innovaRon with a goal-focused mentality § Get started with hands-on, tacRcal Rps
- 3. Introduc3on § Oscar Castro § @ Sears & Kmart from 2006-14 § Led Omnichannel & InternaRonal ecommerce § Joined Big Lots in 2014 § Led the launch on online business in ‘16 § Founded Creare Ventures, focused on early stage digital investments @Ocastro247 Oscar@crearellc.us
- 7. Organiza3onal Honesty § Clear alignment on appeRte § What type(s) will the organizaRon support § Gauge commitment level § Beware the immune system
- 8. Take a Por@olio View § Resource allocaRon § How will each be supported § Skillsets & requirements: match for success
- 10. Rethink Governance Goal Planning • Learning plans & milestones1,2 • NOT assigned targets (rev, profit) Org Structure • Small opportuniRes => small teams2 • Leverage smallness & independence2 Processes • Insulate from exisRng processes • Create some independence 1) The Lean Startup – Eric Ries 2) The Innovator’s Dilemma – C.M. Christensen
- 11. To recap on today’s takeaways… § Understand different innovaRon types § Be honest with yourselves § Plan your porjolio § Establish an innovaRon culture § Prepare to manage differently
- 12. Resources
- 13. Introduc3on § Mike Ward § Joined in 2007 as CIO § Developer/Technologist § Took over as CEO/President in 2013 § Focused on growth and technology as a source of innovaRon
- 14. ThriLBooks – Milestones • Started in 2003 and operated from a storage unit in Kirkland – 2 founders would hand deliver books to the post office in the evenings • In 2007 we opened our second warehouse – Rapid growth for the next 6 years • Today we are the largest used book seller in the world – Over $95M in revenue – Over 700 employees in 11 states – Over 15M books shipped in the last 12 months – Our total Dev and MarkeRng Team is sRll less than 20 people today
- 15. DisrupRve vs Incremental • Video – Indycar 1950 vs 2013 • DisrupRve innovaRon is rare – it may be a myth • Given enough Rme, all incremental innovaRon starts to look like disrupRve innovaRon • You don’t have 63 years
- 16. Robot Wars
- 17. Dynamic Pricing • Challenges/ConsideraRons – Needed to rebuild our system – No bot wars – Not all books are created equal – Market moves quickly – Need to balance speed with consistency to customer – Had to be really fast: from days to minutes
- 18. Innova3on Labs
- 19. InnovaRon labs • Some public sector labs • Some notable closures
- 20. Top 4 InnovaRon Principles • Sense of Mission • Trust and Autonomy • Risk Taking and Tolerance of Failure • Process/System – you need one! Summary of the innovaRon principles that the big labs all share:
- 21. Principles • Sense of Mission – Convert problems to ideas – Think Big, 10X (Google) – Put a dent in the universe (Steve Jobs) – Do what you love (Steve Jobs) – Focus on customer – Remain commiced • Trust and Autonomy – Act Small – Form groups – Trust Management, Trust Each Other • Risk Taking and Tolerance of Failure – Ship oLen – Iterate oLen – Fail well, fail fast, fail small • Process/System – you need one! – Limited Tenure (DARPA) – Greenlight/Redlight – Small groups are the most producRve – Master the message (Heilmeier Catechism) – Feedback loop and short deadlines – Remain disciplined
- 22. Advantages for SMB • InnovaRon is not isolated – only a select few authorized to innovate? • Already the right size • Direct access to customers – Most of your tesRng will be in the real world • Culture becomes shared – No Dilbert poliRcs • ROI is measured directly and quickly
- 23. ThriLBooks’ Approach • With these principles in hand we dove in – MulR departmental • ExecuRve buy-in through acendance • Named the team: Pricing Commicee – Well defined objecRve – Define deadlines • Allow for mulRple quick iteraRons – CommunicaRon Strategy • Depending on your culture you may need to define ground rules of communicaRon – Commicee can be extended… or not • We planned for 2 iteraRons, with an opRon stop, reform, or conRnue
- 24. Pricing Commicee • Method – Write down a goal • Break goal into sub goals (speed, accuracy, framework) – Meet twice a month – Discuss results • ConRnue or stop – CreaRve brainstorming – Queue up addiRonal tests – Modify pricing framework when insufficient for an envisioned test “Accurately set the price of every book at least once a day”
- 25. Dynamic Pricing - results • Result – What used to take days now takes less than 15 minutes – The ability to make 10s of millions of price changes a day – AdapRve to a range of market condiRons – Self-correcRng by modeling customer behavior across more than 7M Rtles