How large corporates can succeed with new businesses without destroying the old ones

1. Making Omelette
Without
Breaking Eggs
How Large Corporates Can Succeed With New
Businesses Without Destroying The Established Ones
Matti Honkanen
22.2.2018

2. 2
“If I had only one hour to save the world
I would spend 55 minutes defining the
problem
and only 5 minutes finding the solution.”
- Albert Einstein -

3. 3
It’s the
structure
stupid!

4. Innovation
Culture Is
Consequence
4

5. “The limits to innovation in large
organizations have nothing to do with
creativity and technology”
“They have everything to do with
management capability."
- Ray Stata Source: “The Other Side of Innovation”
Vijay Govindarajan

6. 1. Create safe haven for new businesses – far from the old ones
2. Divide the businesses in three horizons and fix their shares of
resources on group level (example below)
3. Separate each horizon organisationally
4. Improve (start) your business life-cycle management
Roadmap to Success
6
Horizon 1 Horizon 2 Horizon 3
75% 15% 10%
H1: Established businesses H2: Starting businesses H3: Future businesses

7. Get
Serious!
7

8. First
Disruption
In Banking
Ever
8

9. But We Can
Learn
From Experience
9

10. 10
Stupid
People
Ordinary
People
Extraordinary
People
Don’t learn
from their
mistakes
Do learn
from their
mistakes
Learn
even from others’
mistakes

11. MAINFRAMES 1970s
Source: “Innovator’s Dilemma” and Wikipedia

12. 1970sMINICOMPUTERS 1980
Source: “Innovator’s Dilemma” and Wikipedia

13. MAINFRAMES 1970sMINICOMPUTERS 1980DESKTOP PC:S 1982
Source: “Innovator’s Dilemma” and Wikipedia

14. MAINFRAMES 1970sMINICOMPUTERS 1980DESKTOP PC:S 1982LAPTOPS 1987
Source: “Innovator’s Dilemma” and Wikipedia

15. Next in Line:
We
15

16. Seriously
Industry Profits Will Be
-50 %
in 3 years
16
Source: McKinsey

17. 'The only way to win is to learn
faster than anyone else.'
-Eric Ries
17

18. Why are
they we
failing?
18

19. Fastest Car in The World?
19

20. It Depends
20

21. Our Greatest Assets?
21
Efficiency
Customer
Centricity
Strong Culture

22. 22
They are Going to Sink Us

23. 23
It is not enough to know the storm is coming.
Kodak did know it too.
You have to know what to do.
That’s what Kodak did not know.

24. 24
They are Going to SinkYou
BREAK
ALL THE
RULES!

25. The Future?

26. Don’t cry
26

27. 27
KNOW
THE NEW
RULES!

28. 28
They are Going to SinkYou

29. Innovating is
Bottom-Up Process
It Can and Must be
Managed
BUT

30. 30
DYNAMICS OF INDUSTYComplexity
Time

31. 31
Why can’t 1’000 flowers
bloom together?
R&D
Resources
Sales & Marketing
Resources

32. 32
Even Non-Disruptive Businesses Pose Challenges
• Established businesses
• Material returns already this year
• Starting businesses
• No material returns this year, but only later
• Small but fast-growing
• Future businesses
• Material returns in distant future
• Not yet in the market
H1
H2
H3

33. 33
WHO IS THE TROUBLEMAKER?
H1 H2 H3
Do NOT try to
manage H2s with
structures of H1s – or
you will be doomed!

34. 34
“Insanity is
doing the same thing
over and over again and
expecting a different result”
- Albert Einstein -

35. So, here we are again…

36. How to
get out
36

37. 37
1. Create safe haven for new businesses – far from the old ones
2. Divide the businesses in three horizons and fix their shares of
resources on group level (example below)
3. Separate each horizon organisationally
4. Improve (start) your business life-cycle management
Roadmap to Success
Horizon 1 Horizon 2 Horizon 3
75% 15% 10%
H1: Established businesses H2: Starting businesses H3: Future businesses

38. Our life boat
Nordea runway
Idea
submission
Live
pitching
3-Month
Incubation
134 10 3
Startup
1

39. 1. Play Time
2. Use Disruptors as Raw Material
3. Create Safe Havens for Own Disruptors
#1 Disruptive Trouble Makers

40. 1. Create Safe Havens
2. New KPI:s… (Just kidding)
#2 Non-Disruptive Trouble Makers

41. I Have a Dream
41
That Strategic Leaders read
Clayton Christensen & Geoffrey Moore
Since you can’t think out
of the box if you always
stay inside the box.
And reading for 20 hours
gives you more insight
than listening for 1 hour.
Or:
Escape Velocity

42. I Have a Dream
42
That Managers & Innovators read
Eric Ries & Vijay Govindarajan
Since you can’t think out
of the box if you always
stay inside the box.
And reading for 20 hours
gives you more insight
than listening for 1 hour.

43. 43

44. 44
Where to
get the
resources

45. 45
From Better Life-
Cycle Management

46. 46
Optimise

47. 47
AND NOW…
It’s
the People
Stupid!

48. Thank you!
Matti Honkanen
Matti.honkanen@nordea.com
+358 44 373 9889
www.nordea.com
www.mattihonkanen.com