Finding 3: The failure modes for transition-to-scale-up include both false positives and false negatives. CIUs do well to study both.
Large enterprises face challenges transitioning successful concepts from corporate innovation units (CIUs) to the core business for scaling. There are three types of failures: 1) false positives where concepts appear successful in the CIU but struggle in the core business, 2) false negatives where concepts fail in the CIU but are later successful elsewhere, and 3) downstream false negatives where concepts appear successful in the CIU but later struggle in the core business and are abandoned. Analyzing both successes and failures can provide insights but few firms thoroughly studied post-mortems, missing opportunities for learning
Mc kinsey the eight essentials of innovationChien Do Van
The document discusses eight essential attributes that are present in companies that are high performers in innovation. It summarizes each of the eight essentials: Aspire, Choose, Discover, Evolve, Accelerate, Scale, Extend, and Mobilize. Aspire involves setting an innovation vision and targets. Choose focuses on prioritizing innovation opportunities and managing risk through a portfolio approach. Discover is about generating insights through customer learning and external networks.
A white paper produced by Kenya Markets Trust (KMT) and Engineers Without Borders (EWB) to promote the application of lean management principles to the field of inclusive market development
The document discusses factors for success and failure in innovation. It outlines an innovation growth model with 5 phases (adhoc, program, co-creation, eco-innovation, value chain innovation) and the challenges of moving between each phase. Key success factors discussed are people, management processes, tools, and opening innovation processes to external partners through co-creation.
This document discusses the concept of "minimum viable transformations", which are lightly constructed versions of potential new business models that companies test to learn about risks and uncertainties. It provides examples of companies like Intuit that have successfully transformed their business models by applying principles from startup culture, such as building minimum viable products. The key points made are: 1) Companies are increasingly pursuing business model innovation to keep up with changing market conditions. 2) Transforming business models at scale is risky, so testing prototypes first can provide valuable learning. 3) Intuit transformed to a software-as-a-service model by "acting small" and applying minimum viable product thinking. 4) Minimum viable transformations allow companies to learn fast by failing small in a controlled
Many leading Global In-house Centres (GIC’s) are moving forward to experiment with newer models to create a global impact. The approach aims to maximize the ability of start-ups by bringing in technology. With Global Capability Centres (GCC’s), businesses can create more value and expand their growth in the competitive world.
The progressive mindset of businesses and start-ups has influenced Global In-House Centres (GIC) to explore more realities. The aim is to transform into a global capability centre to gain a more rigid position in terms of the impact of the ecosystem at a global level by experimenting new innovative models.
White paper adapting test & learn for internal startups (jan. 2013)The Inovo Group
This document discusses adapting the "Test & Learn" approach for strategic innovation projects within large companies, referred to as "internal startups." It describes how Test & Learn has traditionally been used by entrepreneurs to manage uncertainty and risk with new startups. However, it requires some adaptation for internal startups, as large companies must first complete an idea discovery phase before beginning Test & Learn. The document outlines the phases of strategic innovation - Discovery, Incubation, and Commercialization. It then explains how Test & Learn can be applied during the Incubation and Commercialization phases to test concepts with customers and iteratively improve the offering to increase the chances of success. Challenges of applying Test & Learn within large companies are also discussed.
White paper adapting test & learn for internal startups (jan. 2013)Brian Christian
This document discusses adapting the "Test & Learn" approach for strategic innovation projects within large companies, referred to as "internal startups." It describes how Test & Learn has traditionally been used by entrepreneurs to manage uncertainty and risk with new startups. However, it requires some adaptation for internal startups, as large companies must first complete an idea discovery phase before beginning Test & Learn. The document outlines the phases of strategic innovation - discovery, incubation, and commercialization - and how Test & Learn replaces the latter two phases. It also notes some key differences between how Test & Learn is applied to true startups versus internal startups within large organizations.
Mc kinsey the eight essentials of innovationChien Do Van
The document discusses eight essential attributes that are present in companies that are high performers in innovation. It summarizes each of the eight essentials: Aspire, Choose, Discover, Evolve, Accelerate, Scale, Extend, and Mobilize. Aspire involves setting an innovation vision and targets. Choose focuses on prioritizing innovation opportunities and managing risk through a portfolio approach. Discover is about generating insights through customer learning and external networks.
A white paper produced by Kenya Markets Trust (KMT) and Engineers Without Borders (EWB) to promote the application of lean management principles to the field of inclusive market development
The document discusses factors for success and failure in innovation. It outlines an innovation growth model with 5 phases (adhoc, program, co-creation, eco-innovation, value chain innovation) and the challenges of moving between each phase. Key success factors discussed are people, management processes, tools, and opening innovation processes to external partners through co-creation.
This document discusses the concept of "minimum viable transformations", which are lightly constructed versions of potential new business models that companies test to learn about risks and uncertainties. It provides examples of companies like Intuit that have successfully transformed their business models by applying principles from startup culture, such as building minimum viable products. The key points made are: 1) Companies are increasingly pursuing business model innovation to keep up with changing market conditions. 2) Transforming business models at scale is risky, so testing prototypes first can provide valuable learning. 3) Intuit transformed to a software-as-a-service model by "acting small" and applying minimum viable product thinking. 4) Minimum viable transformations allow companies to learn fast by failing small in a controlled
Many leading Global In-house Centres (GIC’s) are moving forward to experiment with newer models to create a global impact. The approach aims to maximize the ability of start-ups by bringing in technology. With Global Capability Centres (GCC’s), businesses can create more value and expand their growth in the competitive world.
The progressive mindset of businesses and start-ups has influenced Global In-House Centres (GIC) to explore more realities. The aim is to transform into a global capability centre to gain a more rigid position in terms of the impact of the ecosystem at a global level by experimenting new innovative models.
White paper adapting test & learn for internal startups (jan. 2013)The Inovo Group
This document discusses adapting the "Test & Learn" approach for strategic innovation projects within large companies, referred to as "internal startups." It describes how Test & Learn has traditionally been used by entrepreneurs to manage uncertainty and risk with new startups. However, it requires some adaptation for internal startups, as large companies must first complete an idea discovery phase before beginning Test & Learn. The document outlines the phases of strategic innovation - Discovery, Incubation, and Commercialization. It then explains how Test & Learn can be applied during the Incubation and Commercialization phases to test concepts with customers and iteratively improve the offering to increase the chances of success. Challenges of applying Test & Learn within large companies are also discussed.
White paper adapting test & learn for internal startups (jan. 2013)Brian Christian
This document discusses adapting the "Test & Learn" approach for strategic innovation projects within large companies, referred to as "internal startups." It describes how Test & Learn has traditionally been used by entrepreneurs to manage uncertainty and risk with new startups. However, it requires some adaptation for internal startups, as large companies must first complete an idea discovery phase before beginning Test & Learn. The document outlines the phases of strategic innovation - discovery, incubation, and commercialization - and how Test & Learn replaces the latter two phases. It also notes some key differences between how Test & Learn is applied to true startups versus internal startups within large organizations.
Insights about Corporate Venturing Capital and InnovationMiquel Angel Perez
This document discusses corporate venture capital (CVC) and innovation from a business model perspective. It defines CVC as a large firm taking an equity stake in a small, innovative startup to gain a competitive advantage. The document presents the CVC business model canvas and explains that a CVC's value proposition is in helping startups mature and increase their value through strategic support rather than just financial investment. It concludes that measuring a CVC's effectiveness in accelerating startup maturation is still a challenge, and that a CVC must balance short-term financial results with enabling long-term innovation.
More Information:
https://flevy.com/browse/flevypro/4-stages-of-disruption-5265
Organizations are constantly trying to innovate and, likewise, all industries will eventually be disrupted, as new products, businesses, and industries emerge.
No industry is safe from Disruption. In a 2017 PwC survey of 1,379 CEOs around the world, 60% said their market has already changed or completely reshaped in the past 5 years and over 75% anticipate they would by 2022.
This presentation discusses the 4 Stages of Disruption. Research has found Innovation that eventually leads to Disruption follows a 4-stage evolution:
1. Disruption of Incumbent
2. Rapid and Linear Evolution
3. Appealing Convergence
4. Complete Reimagination
Understanding this 4-stage model will help us understand what design choices to prioritize and when. At any given time, different products and organizations are likely to be at different stages relative to local “end point†of Innovation.
Additional topics discussed include Disruptive vs. Incumbent Dynamics, the Consumer Adoption Curve, Endgame Niche Strategies, among others.
This deck also includes slide templates for you to use in your own business presentations.
Got a question about the product? Email us at flevypro@flevy.com.
Building an innovation engine - foundations for growth: how to identify and b...John Pisciotta
The document discusses strategies for companies to identify and build disruptive new businesses that can drive significant growth. It outlines two main strategies:
1. Creating a new market as a base for disruption by targeting non-consumers and developing simple, affordable innovations that allow new types of customers to consume in new ways.
2. Disrupting an existing business model from the low end by targeting the least demanding customers in a market where existing products are over-serving them, and doing so with a disruptive business model allowing deep discounts.
The strategies are based on two sets of "litmus tests" innovations must pass to have success - tests related to targeting non-consumers, simplicity, and helping customers do
1) Companies are looking beyond their core business to achieve growth through new areas that account for 42% of revenues by 2020.
2) Top innovators obtain a higher percentage of revenues from new products/services and break even faster than competitors. However, it is becoming increasingly difficult to stay ahead.
3) A framework called the Growth Accelerator Program helps companies create a shared vision for growth, find new growth opportunities, and deliver growth through roadmaps, pilots, and ensuring the right organization and culture.
project harmonization after mergers and acquisitionsMatt Green
This document outlines four key steps for aligning project portfolios after a merger or acquisition (M&A): 1) Align on the overall strategy, 2) Identify opportunities for synergies and resource sharing, 3) Develop an aligned new product development (NPD) process and common language, and 4) Create visibility and control across the combined pipeline. The document uses examples from the medical device industry to illustrate how to identify commonalities between seemingly different processes to facilitate portfolio alignment after M&A.
The document discusses the important role boards play in driving innovation within companies during times of leadership and strategic changes. It notes that while CEOs average short tenures of 2-3 years, boards provide important continuity. Boards should clarify the company's innovation strategy and goals, quantify the impacts of innovation, shape the appropriate risk appetite, and ensure innovation remains a priority on the agenda. This will help companies adapt to changing competitive landscapes and sustain long term growth.
Company ReBuilding : Moving into a new dimension of value creation (Compendium)Marc Wagner
About Company Rebuilding: Company what? Another buzzword? What does is mean! Using the analogy of cellular growth, corporate renewal is based on the principle of continual cell division, whereby organizational growth is controlled, organically and inorganically, by platforms that control communication and value creation, thus providing the basis for the creation of new, transformational products.
It is crucial that when creating new units or cells, that clear rules of organizational cooperation (New Work) are established where a common set of values are established and, in particular, rules for the creation of new cells are set. All organically created units carry one and the same DNA, which has customers and employees at each end of the double helix, ensuring that all kinds of non-value-adding structures and activities are eliminated immediately. All units of this newly created ecosystem must be guided by a clearly formulated vision (purpose), which specifically focuses on customer value and has the potential to produce transformational products. This purpose serves as a magnet for new partners and stakeholders in the value creation process.
The presentation provides an general overview of the Company ReBuilding concept, the underlying Communities of practices & references
For further information contact: marc.wagner@detecon.com
It is difficult it is to identify companies that have scalable business models AND equally important will they be able to execute their business plans. We have been working on this challenge now for over 4 years.In the past, a few interviews and some financial analysis might have been enough. Today, markets are more complex, and businesses are harder to evaluate. To solve this challenge have recently combined over 10 years of research on more than 10,000 companies to create an assessment that objectively measures: 1/. Scalability of the business 2/. And their ability to deliver innovation consistently.
The accuracy of our assessments are very good. Right now, with a 1-hour assessment, we are able to correctly classify businesses by scalability and able to predict just under 80% of their variance of innovation success
BDMSummit - 2016 Oleksandr Pavlenko "Startup Accelerators and Products"Lviv Startup Club
The document discusses trends in the accelerator industry and strategies for the future. It identifies five big trends affecting accelerators: pre-acceleration, verticalization, going global through international expansion and accelerator networks, evolving business models, and differing accelerator models. Accelerators are working to improve the quality of startups, shift to more specialized vertical models, expand internationally through partnerships, develop sustainable revenue streams, and accommodate varying startup stages. The quality provided by top accelerators is not replicated by most others who follow their models.
Startup Engagement : Best Practices for Large OrganizationsMohsen Mokhtari
The document discusses Innovation Leader's annual corporate innovation conference called Impact. Impact helps senior innovation professionals at large organizations learn how to deliver value and real business impact. At Impact 2019, senior executives from successful companies like Comcast NBCUniversal, Bose, and Nationwide will share insights and lessons learned. The conference involves interactive sessions, workshops, and networking opportunities. It provides actionable takeaways, frameworks and tools. The goal is for participants to gain skills and access a network of other innovation professionals.
The document also provides information about Techstars sponsoring Innovation Leader's research on startup engagement strategies for large organizations. Techstars has insights from its corporate partnerships on disruption facing large companies. The research includes survey data and interviews with
This document provides a methodology for innovation at both the organizational and regional levels. It outlines a multi-step process including an initial kick-off, audit, ideas lab, implementation, roll-out, and continuous improvement. For organizations, the focus is on discrete innovation projects. For regions, the approach centers on continuous innovation through business incubation activities, research, idea generation, and implementation of infrastructure and support services. Key activities at the regional level include clustering industries and knowledge transfer partnerships.
- The document summarizes a survey of 246 CEOs about innovation conducted by PwC.
- It finds that CEOs now see innovation as vital for business survival and are taking more direct responsibility for driving innovation. However, organizational culture can still inhibit innovation.
- Companies are looking for more radical innovation in business models and customer experiences, not just products. Successful innovation also requires collaboration beyond R&D and involving frontline teams.
- The document summarizes a survey of 246 CEOs about innovation conducted by PwC.
- It finds that CEOs now see innovation as vital for business survival and are taking more direct responsibility for driving innovation. However, organizational culture can still inhibit innovation.
- Companies are looking for more radical innovation in business models and customer experiences, not just products. Successful innovation also requires collaboration beyond R&D and involving frontline teams.
The Growth and Innovation Group (GIG) provides training and implementation services to help clients discover, shape, and launch new growth platforms by systematically reducing uncertainties. GIG has experience in many industries and works with clients to identify opportunities beneath market discontinuities that can be addressed by existing capabilities. GIG's approach involves developing opportunities as business platforms consisting of related projects, minimizing financial risk through outsourcing non-core capabilities, and adapting organizational design to support new business development.
Enhancement in NDT inspection for operational effectiveness, efficiency and e...Innerspec Technologies
We intend to show that any change shall be linked, not only to improvement, but also to immediate cost reduction so that all management structure can conceive quick implementation as
part of its department strategy & enhancement in their budget cost.
For that, concepts such as effectiveness, efficiency and excellence must be approached. We will give clear saving cost ways which will follow the terminology.
In Financial terms and without a deep analysis, we can conrm cost savings above 30% from current prices are achieved.
This document discusses portfolio management and outlines several key aspects:
1) It describes how organizations must allocate resources between unavoidable operational costs and discretionary activities like R&D and capital projects.
2) It emphasizes the need for a vision and business strategy to provide context for innovation planning and prioritizing projects.
3) It stresses having domain strategies to support the business strategy and prioritize projects within areas like R&D, capital expenditures, and organizational efficiency.
Innovation would seem by default to require research and development. But R&D is increasingly under fire for being unpredictable at "delivering" business gains. Does making R&D predictable become a prerequisite for innovation's "creativity"?
This document discusses accelerating product venture development in India. It outlines the need to shift focus from services to innovative products that can generate more foreign exchange. An open ecosystem is proposed, with technologists, investors, incubators and a supportive supply chain and tax system. Key elements include identifying promising ventures, providing resources and funding, establishing performance metrics, and influencing industry and tax policies to promote globally competitive product startups in India. This could transform small ventures into large profitable companies and boost the economy.
Slides from a recent speech in front of 1500 people on:
- Why business model innovation is important
- What a business model is
- How to design and implement innovative business models using a design thinking approach.
Many cases illustrate how to do it in practice.
Optimizing Net Interest Margin (NIM) in the Financial Sector (With Examples).pdfshruti1menon2
NIM is calculated as the difference between interest income earned and interest expenses paid, divided by interest-earning assets.
Importance: NIM serves as a critical measure of a financial institution's profitability and operational efficiency. It reflects how effectively the institution is utilizing its interest-earning assets to generate income while managing interest costs.
Insights about Corporate Venturing Capital and InnovationMiquel Angel Perez
This document discusses corporate venture capital (CVC) and innovation from a business model perspective. It defines CVC as a large firm taking an equity stake in a small, innovative startup to gain a competitive advantage. The document presents the CVC business model canvas and explains that a CVC's value proposition is in helping startups mature and increase their value through strategic support rather than just financial investment. It concludes that measuring a CVC's effectiveness in accelerating startup maturation is still a challenge, and that a CVC must balance short-term financial results with enabling long-term innovation.
More Information:
https://flevy.com/browse/flevypro/4-stages-of-disruption-5265
Organizations are constantly trying to innovate and, likewise, all industries will eventually be disrupted, as new products, businesses, and industries emerge.
No industry is safe from Disruption. In a 2017 PwC survey of 1,379 CEOs around the world, 60% said their market has already changed or completely reshaped in the past 5 years and over 75% anticipate they would by 2022.
This presentation discusses the 4 Stages of Disruption. Research has found Innovation that eventually leads to Disruption follows a 4-stage evolution:
1. Disruption of Incumbent
2. Rapid and Linear Evolution
3. Appealing Convergence
4. Complete Reimagination
Understanding this 4-stage model will help us understand what design choices to prioritize and when. At any given time, different products and organizations are likely to be at different stages relative to local “end point†of Innovation.
Additional topics discussed include Disruptive vs. Incumbent Dynamics, the Consumer Adoption Curve, Endgame Niche Strategies, among others.
This deck also includes slide templates for you to use in your own business presentations.
Got a question about the product? Email us at flevypro@flevy.com.
Building an innovation engine - foundations for growth: how to identify and b...John Pisciotta
The document discusses strategies for companies to identify and build disruptive new businesses that can drive significant growth. It outlines two main strategies:
1. Creating a new market as a base for disruption by targeting non-consumers and developing simple, affordable innovations that allow new types of customers to consume in new ways.
2. Disrupting an existing business model from the low end by targeting the least demanding customers in a market where existing products are over-serving them, and doing so with a disruptive business model allowing deep discounts.
The strategies are based on two sets of "litmus tests" innovations must pass to have success - tests related to targeting non-consumers, simplicity, and helping customers do
1) Companies are looking beyond their core business to achieve growth through new areas that account for 42% of revenues by 2020.
2) Top innovators obtain a higher percentage of revenues from new products/services and break even faster than competitors. However, it is becoming increasingly difficult to stay ahead.
3) A framework called the Growth Accelerator Program helps companies create a shared vision for growth, find new growth opportunities, and deliver growth through roadmaps, pilots, and ensuring the right organization and culture.
project harmonization after mergers and acquisitionsMatt Green
This document outlines four key steps for aligning project portfolios after a merger or acquisition (M&A): 1) Align on the overall strategy, 2) Identify opportunities for synergies and resource sharing, 3) Develop an aligned new product development (NPD) process and common language, and 4) Create visibility and control across the combined pipeline. The document uses examples from the medical device industry to illustrate how to identify commonalities between seemingly different processes to facilitate portfolio alignment after M&A.
The document discusses the important role boards play in driving innovation within companies during times of leadership and strategic changes. It notes that while CEOs average short tenures of 2-3 years, boards provide important continuity. Boards should clarify the company's innovation strategy and goals, quantify the impacts of innovation, shape the appropriate risk appetite, and ensure innovation remains a priority on the agenda. This will help companies adapt to changing competitive landscapes and sustain long term growth.
Company ReBuilding : Moving into a new dimension of value creation (Compendium)Marc Wagner
About Company Rebuilding: Company what? Another buzzword? What does is mean! Using the analogy of cellular growth, corporate renewal is based on the principle of continual cell division, whereby organizational growth is controlled, organically and inorganically, by platforms that control communication and value creation, thus providing the basis for the creation of new, transformational products.
It is crucial that when creating new units or cells, that clear rules of organizational cooperation (New Work) are established where a common set of values are established and, in particular, rules for the creation of new cells are set. All organically created units carry one and the same DNA, which has customers and employees at each end of the double helix, ensuring that all kinds of non-value-adding structures and activities are eliminated immediately. All units of this newly created ecosystem must be guided by a clearly formulated vision (purpose), which specifically focuses on customer value and has the potential to produce transformational products. This purpose serves as a magnet for new partners and stakeholders in the value creation process.
The presentation provides an general overview of the Company ReBuilding concept, the underlying Communities of practices & references
For further information contact: marc.wagner@detecon.com
It is difficult it is to identify companies that have scalable business models AND equally important will they be able to execute their business plans. We have been working on this challenge now for over 4 years.In the past, a few interviews and some financial analysis might have been enough. Today, markets are more complex, and businesses are harder to evaluate. To solve this challenge have recently combined over 10 years of research on more than 10,000 companies to create an assessment that objectively measures: 1/. Scalability of the business 2/. And their ability to deliver innovation consistently.
The accuracy of our assessments are very good. Right now, with a 1-hour assessment, we are able to correctly classify businesses by scalability and able to predict just under 80% of their variance of innovation success
BDMSummit - 2016 Oleksandr Pavlenko "Startup Accelerators and Products"Lviv Startup Club
The document discusses trends in the accelerator industry and strategies for the future. It identifies five big trends affecting accelerators: pre-acceleration, verticalization, going global through international expansion and accelerator networks, evolving business models, and differing accelerator models. Accelerators are working to improve the quality of startups, shift to more specialized vertical models, expand internationally through partnerships, develop sustainable revenue streams, and accommodate varying startup stages. The quality provided by top accelerators is not replicated by most others who follow their models.
Startup Engagement : Best Practices for Large OrganizationsMohsen Mokhtari
The document discusses Innovation Leader's annual corporate innovation conference called Impact. Impact helps senior innovation professionals at large organizations learn how to deliver value and real business impact. At Impact 2019, senior executives from successful companies like Comcast NBCUniversal, Bose, and Nationwide will share insights and lessons learned. The conference involves interactive sessions, workshops, and networking opportunities. It provides actionable takeaways, frameworks and tools. The goal is for participants to gain skills and access a network of other innovation professionals.
The document also provides information about Techstars sponsoring Innovation Leader's research on startup engagement strategies for large organizations. Techstars has insights from its corporate partnerships on disruption facing large companies. The research includes survey data and interviews with
This document provides a methodology for innovation at both the organizational and regional levels. It outlines a multi-step process including an initial kick-off, audit, ideas lab, implementation, roll-out, and continuous improvement. For organizations, the focus is on discrete innovation projects. For regions, the approach centers on continuous innovation through business incubation activities, research, idea generation, and implementation of infrastructure and support services. Key activities at the regional level include clustering industries and knowledge transfer partnerships.
- The document summarizes a survey of 246 CEOs about innovation conducted by PwC.
- It finds that CEOs now see innovation as vital for business survival and are taking more direct responsibility for driving innovation. However, organizational culture can still inhibit innovation.
- Companies are looking for more radical innovation in business models and customer experiences, not just products. Successful innovation also requires collaboration beyond R&D and involving frontline teams.
- The document summarizes a survey of 246 CEOs about innovation conducted by PwC.
- It finds that CEOs now see innovation as vital for business survival and are taking more direct responsibility for driving innovation. However, organizational culture can still inhibit innovation.
- Companies are looking for more radical innovation in business models and customer experiences, not just products. Successful innovation also requires collaboration beyond R&D and involving frontline teams.
The Growth and Innovation Group (GIG) provides training and implementation services to help clients discover, shape, and launch new growth platforms by systematically reducing uncertainties. GIG has experience in many industries and works with clients to identify opportunities beneath market discontinuities that can be addressed by existing capabilities. GIG's approach involves developing opportunities as business platforms consisting of related projects, minimizing financial risk through outsourcing non-core capabilities, and adapting organizational design to support new business development.
Enhancement in NDT inspection for operational effectiveness, efficiency and e...Innerspec Technologies
We intend to show that any change shall be linked, not only to improvement, but also to immediate cost reduction so that all management structure can conceive quick implementation as
part of its department strategy & enhancement in their budget cost.
For that, concepts such as effectiveness, efficiency and excellence must be approached. We will give clear saving cost ways which will follow the terminology.
In Financial terms and without a deep analysis, we can conrm cost savings above 30% from current prices are achieved.
This document discusses portfolio management and outlines several key aspects:
1) It describes how organizations must allocate resources between unavoidable operational costs and discretionary activities like R&D and capital projects.
2) It emphasizes the need for a vision and business strategy to provide context for innovation planning and prioritizing projects.
3) It stresses having domain strategies to support the business strategy and prioritize projects within areas like R&D, capital expenditures, and organizational efficiency.
Innovation would seem by default to require research and development. But R&D is increasingly under fire for being unpredictable at "delivering" business gains. Does making R&D predictable become a prerequisite for innovation's "creativity"?
This document discusses accelerating product venture development in India. It outlines the need to shift focus from services to innovative products that can generate more foreign exchange. An open ecosystem is proposed, with technologists, investors, incubators and a supportive supply chain and tax system. Key elements include identifying promising ventures, providing resources and funding, establishing performance metrics, and influencing industry and tax policies to promote globally competitive product startups in India. This could transform small ventures into large profitable companies and boost the economy.
Slides from a recent speech in front of 1500 people on:
- Why business model innovation is important
- What a business model is
- How to design and implement innovative business models using a design thinking approach.
Many cases illustrate how to do it in practice.
Optimizing Net Interest Margin (NIM) in the Financial Sector (With Examples).pdfshruti1menon2
NIM is calculated as the difference between interest income earned and interest expenses paid, divided by interest-earning assets.
Importance: NIM serves as a critical measure of a financial institution's profitability and operational efficiency. It reflects how effectively the institution is utilizing its interest-earning assets to generate income while managing interest costs.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
1. missing the exit
how to translate success in the incubator to
success in the core business
2. A special thank
you to the
Good Samaritan
Society for
sponsoring this
research.
How do innovation teams help
promising concepts transition to the
core business for scale-up?
This is one of the most difficult
challenges facing large enterprises. It’s
one thing to launch a new product within
an existing line of business. That process
is well understood.
Breakthrough growth, however,
demands that we continually explore
ways to reinvent the core business
or enter adjacent markets. For most
large organizations, these explorations
take place in a special incubator or
accelerator. Once a concept finds
success in the incubator, it must
transition to the core business to be
scaled.
This process – the transition to scale-
up – is a common failure mode for
innovation. Many external acquisitions
fail to meet their goals after the deal
closes. Similarly, many innovations fail
after they have been validated in the
incubator. Why?
study design overview
1
3. Study Design
From 2015-2016, Peer Insight set
out to understand the causes and
possible solutions to this challenge.
First, we held an extensive series of
panel discussions with experienced
practitioners. The second stage was
a series of in-depth, one-to-one
interviews. This allowed us to drill-
down into unique approaches as well as
zoom-out to see larger patterns.
Eventually, we engaged over two dozen
practitioners over a ten-month period.
Each of the participants has from
6-25 years experience in the field, and
holds a position within the corporate
incubator (or equivalent) at a Fortune
500 firm. The spirit was this: A small
group of admired, non-competitor
firms putting their senior practitioners
together to help each other improve.
No other agendas, just straight talk in a
safe setting.
Similarities
The participating firms cover a wide
range of industries including banking,
retail, food and beverage, hospitality,
healthcare, apparel, elder services,
industrial coatings, and high-tech.
Benchmarking projects focus on
the differences between firms, but
it’s important to understand the
similarities first. All of the participating
innovation groups share some
important attributes:
• Part of a large enterprise (all >$1B
in sales)
• Serve as a central corporate
innovation unit (CIU)
• Function as a shared service cost
center
• Are complementary to BU-based
new product development / R&D
groups
• Have the charter to focus on higher-
risk, disruptive opportunities
2
4. The role of a corporate innovation
unit (CIU) is unique compared to that
of the core business. Your CIU teams
must understand the needs of the
execution units you serve, but your
own processes are optimized for
exploration, and you must deal with
much greater uncertainty. This paradox
has been explored thoughtfully by many
authors. Our analysis will rely on two in
particular, both published in the Harvard
Business Review:
“The Ambidextrous Organization”
(O’Reilly & Tushman, HBR, May 2004)
“Managing Your Innovation Portfolio”
(Nagii & Tuff, HBR, May 2012)
O’Reilly & Tushman highlight the need
for large enterprises to exploit their
known business, while simultaneously
exploring future possibilities. In their
view, balancing this exploit-explore
paradox represents ambidexterity. The
CIU structure within the participating
benchmark firms closely mirrors the
three key elements that comprise an
ambidextrous organization:
1. Separate charter and funding for the
exploration unit (the CIU)
2. Distinct culture and methods in the
exploration unit
3. Tight linkage to the core business at
the senior executive level (to enable
transition to scale-up)
In “Managing Your Innovation Portfolio,”
Nagii & Tuff observe how large firms
typically allocate 70% of their innovation
resources to improving the core,
another 20% to exploring adjacencies,
and the final 10% to transformational
opportunities. Interestingly, the returns
show just the opposite proportions;
about 10% of their future growth comes
from the core, while 20% comes from
adjacencies and 70% comes from
transformational opportunities. They
dub this effect the 70-20-10 rule.
ciu vs. core business
3
5. Peer Insight analyzed the results of the
benchmarking panels with these two
frameworks in mind. The findings will
use terminology derived from these
concepts, including these key terms:
CIU: Corporate innovation unit; the
group chartered to explore emerging
possibilities and navigate high
uncertainty. In effect, the CIU exists
to de-risk new opportunities and,
when successful, transition them to
the core business for scale-up.
CONNECTIVE TISSUE: The
linkages between the CIU and
the core business (part 3 of
O’Reilly & Tushman’s definition of
ambidexterity).
CORE BUSINESS: The BUs and other
assets that focus on exploiting the
known business.
NPD: New product development;
part of the core business, follows a
stage-gate method, and deploys 70%
of the innovation resources to create
line extensions and other lower-risk
improvements.
70-20-10: The allocation of
innovation resources across core,
adjacent, and transformational
activities, respectively. We view 20-10
as the activities performed by the
CIU, with the 70 being performed by
BU-based NPD groups.
terminology
4
6. While the frameworks noted above are
helpful, it is simpler to make an analogy
to venture capital. VC firms have a
charter very similar to a CIU:
• Explore concepts with the
opportunity for extraordinary returns
• Accept high uncertainty/risk
• De-risk opportunities quickly through
in-market experiments
• Tolerate failure as long as they
provide strategic learning
• Graduate the most successful
concepts to “exit strategy”investors
who can help them scale
The VC investing model can be
expressed using a Risk Investment Curve
(page 9). This model also describes
the relationship of the CIU to the
downstream NPD process, and ultimately
to the Core Business. The activities of
the CIU focus on the left-hand column,
Research, and help concepts come
down the risk curve quickly using the
fewest possible resources. The primary
activity in Research is in-market
experimentation. Most importantly, all
the development and experimentation
is done off-platform. In that way, the
CIU does not distract the Core Business
from fulfilling its commitments, and
experiments can be done affordably.
(We sometimes think of this zone as the
petri dish, because the experiments are
small and self-contained, so as not to
contaminate the operating aspects of
the business.)
Success rates in the Research zone
are often below 33%, just as they are
in VC firms. This phase mirrors the
Angel, Seed, and A-round stages of
venture capital. Startups in this VC phase
are typically pre-revenue, and always
pre-profit. So are the ventures that
participating CIUs in our benchmarking
group are working on. (Indeed, several
participating firms build their pipelines
with the assumption of 60%+ mortality
rates for concepts in this stage.)
NPD, by contrast, occurs in the middle
column, labeled Development. The
work flows here tend to follow a stage-
gate model. Success rates are typically
greater than 80% – a big difference
from the Research stage. At this point,
the concept has validated the customer
need and the business model, and is
building a technical platform that can
scale profitably. In the VC analogy, these
ventures are spending B-round and
mezzanine investment funds, and are
typically post-revenue..
The third column, Execution, is where
the Core Business operates. At this point,
concepts have high investment but the
risk of failure is very low. The goals at
this stage are to scale it profitably.
vc analogy
5
7. vc analogy
The primary question we posed to the
benchmarking cohort was:
“How do innovation teams help
promising concepts transition to the
core business for scale-up?”
Using the the Risk Investment Curve, we
might restate the question as:
“How do promising concepts move
from Research, to Development, to
Execution?”
In the illustration on the next page,
our Risk Investment Curve charts two
projects. Project A starts down the
curve and, in the Concept stage, begins
to fail. It is shelved at Point X. Project B
moves successfully from the Concept
stage into the Venture stage. Now it is
ready to begin a transition to formal
Development.
The Risk Investment Curve is useful
for two reasons. One, it helps senior
executives appreciate the need to
enable off-platform experimentation.
If there is no safe place to explore
heretical possibilities – no place to
act as a VC – then your firm’s past
becomes a box from which there is no
escape. Two, it highlights the challenge
of crossing from Research into
Development. This is where O’Reilly &
Tushman call for a “tight linkage to the
Core Business.” And this is where a VC
knows they need strong relationships
with growth capital investors.
In the Findings that follow, we will take
a detailed look at how participating
benchmark firms navigate that transition.
6
8. RISK
low
high
INVESTMENT
low high
research development execution
(innovation) (new service development) (operations)
off-platform on-platform
BUILD A NEW
SERVICE
LAUNCH AND
EXTEND
innovation de-risking path
live
alpha test
beta test
concept
validation
needs
finding
risk investment curve
risk investment curve
Figure 1 Risk Investment Curve
7
9. FINDING 1: It’s one thing to kill a
concept early. But when it succeeds in
the incubator only to fail in the Core
Business, that shakes our faith.
FINDING 2: In a large enterprise, the
gap between explore and execute is just
too great to be crossed with ease, even
by the most promising venture.
FINDING 3: The failure modes for
transition-to-scale-up include both false
positives and false negatives. CIUs do
well to study both.
FINDING 4: It’s not what’s wrong, it’s
what’s missing. CIUs must introduce
new elements to form a more complete
innovation system.
FINDING 5: As Step 1, CIUs enhance their
ability to de-risk new concepts. They
become a better petri dish in 3 ways.
FINDING 6: As Step 2, the innovation
group must build connective tissue with
the Core Business. Once a customer,
now a collaborator.
FINDING 7: As an emergent Step 3,
many CIUs are experimenting with a
middle way. A place to go from post-
revenue to post-profit.
FINDING 8: Another emerging practice
is to tap into third party risk capital and
IP. Think of it as Make vs. Stake.
FINDING 9: Step 4 is to empower
senior leadership with a dual mindset;
lead execution with certainty, lead
exploration with curiosity. Just like a VC.
FINDING 10: The strongest connective
tissue is human-to-human. The CIU
leader and staff must serve as growth
whisperers.
ƓPFKPIUUWOOCT[
8
10. Coming up with new ideas is easy.
Connecting unmet user needs with
viable business models is difficult. And
transitioning that promising concept
to scale-up is one of the most difficult
things to do in business.
Nine out of ten startups fail. The
success rate may not be any better
inside a large enterprise.
When opportunities fail inside the
Central Innovation Unit (CIU), that’s
often part of the Darwinian logic of the
fuzzy front end. We purposely create
too many concepts and let the market
of hungry users select the winners. Of
the eight firms participating in our
benchmarking panel discussions in
November-December 2014, all firms
use planned mortality in the incubation
stage, and many expect greater than
50% mortality.
However…when those concepts succeed
within the CIU, then fail upon transition
into the Core Business, that really hurts.
It’s like the one that got away. We’ve
already invested in it. We’ve carefully
de-risked it, or so we think. And then
it fizzles inside the scaling unit, for one
reason or another.
During our panel discussions and the
one-to-one interviews that followed, this
is what we heard from the practitioners:
• Industry differences are irrelevant;
the challenge of transitioning to
scale-up is highly similar across
diverse firms
• When failures occur, the CIU needs
to look in the mirror and figure out
what’s missing
• There are steps we can take to
improve the odds
• Some steps are already proven by
several of the participating firms (and
described herein)
• Others are newly emerging, but show
encouraging early results
ƓPFKPI
It’s one thing to kill a concept early. But when it succeeds
in the incubator only to fail in the Core Business, that
shakes our faith.
“Success has
many fathers, but
failure is always an
orphan.”
“[In 2013] we found our lab was
graduating more concepts to the
shelf than to the Core [business]. The
BUs were just too constrained on the
execution end.”
9
11. “Transition is a phase, not
a moment. We need to
hold the baton together for
a time.”
“If you start [the venture]
in the wrong place [CIU vs.
BU], its hard to correct that
in mid-stream.”
Private startups compete for funding in
an open, efficient market for risk capital.
There are investors that specialize in
various levels of risk tolerance, from
angel funding, to seed stage, series A,
and mezzanine financing for growth
firms. By contrast, the corporate
environment has only early stage
investment (the CIU), then, suddenly,
the venture has to IPO (transition to the
core business).
That giant step up – from the CIU to
the CORE BUSINESS – is just too big
for most growth teams to navigate. This
contrast was borne out in our interviews
with the benchmark panel members.
The Core Business investor expects fast
results that hit his bottom line this year.
The growth team still needs to work out
its operating model and make smaller
pivots in its value proposition.
An incremental innovation (such as a
line extension to an existing product)
can make the transition, but most
high-potential concepts bring high
uncertainty with them. These concepts
depend upon extraordinary protection
if they are to survive. This protection
comes from either the C-Suite or the
Core Business leader. The head of the
CIU can influence that dialog, but in
every case the patience – which also
means the funding – has to come from
one of those two senior leaders.
The challenge of transition-to-scale-up
can be understood by imagining the Risk
Investment Curve (Figure 1, introduced
on page 9). Most corporations are set
up to execute their core business, so
they view new concepts as fitting into
their New Service Development stage-
gate process (the middle column).
This is fine for lower-risk incremental
innovations. But to enter adjacencies
or introduce disruptive possibilities, we
must recognize we are starting much
higher up on the curve (Research).
There are many more unknowns, and
the de-risking process is fundamentally
different.
ƓPFKPI
In a large enterprise, the gap between explore and
execute is just too great to be crossed with ease, even by
the most promising venture.
10
12. Failure is common in the transition-
to-scale-up process, and several firms
shared specific failure stories. They also
spoke about successes, of course, but
the failures seem to leave a more lasting
mark. There are three forms of failures
for ventures in the CIU:
• FALSE POSITIVE: Appears to work in
the CIU, but it struggles in the Core
Business, and gets abandoned
• FALSE NEGATIVE, UPSTREAM:
Fails to make it out of the CIU,
then appears in the market from a
competitor or startup
• FALSE NEGATIVE, DOWNSTREAM:
Appears to work in the CIU, struggles
in the Core Business, is abandoned,
then appears in the market from
a competitor
Startups may be able to tolerate failure
as part of the journey toward success,
but large enterprises are far less
philosophical. Each of the failure types
above puts stress on the relationship
between the CIU, the Core Business,
and the C-Suite, which often mediates
between the two. The symptoms we
heard from the panelists include finger-
pointing, disowning of the project, and
general disagreements about the causes
of failure.
[Failure cause analysis is an inexact
science at best. But what a crucial
opportunity! Few of the participating
firms mentioned their post-mortem
process, which would seem to hold
great potential. This is true for both
success and failure.]
Despite the diverse immediate
reactions, when the dust settles, CIUs
tend to internalize each failure as their
responsibility. From a transition-to-scale-
up perspective, each of the benchmark
panel firms has spent time looking at
the transition process, to see which
elements need to be strengthened. The
Findings that follow will discuss the
most common enhancements in the
benchmark group.
ƓPFKPI
The failure modes for transition to scale-up include both false
positives and false negatives. CIUs do well to study both.
“We created [concept],
validated it with customers,
proved it to the Core Business
– then no one believed it was
worth doing. Only when the
competition started doing it
did we spring into reactive
mode.”
“My advice: Stay
humble and don’t steal the
limelight from a business
partner. You need them to
come back [to the CIU] to
incubate more opportunities.”
“If everything
you build
creates
heartburn,
you’re dead.”
11
13. “We discovered we need
higher-fidelity prototypes
[to enroll customers for co-
creation]. But we have to get
there fast. Our new Maker
Lab enables that.”
“We’ve learned
to get early
involvement
from the people
that have to
execute it,
often the sales
organization.”
“We decided on the incubator
process by creating growth maps
for our [strategic] platforms. We
could see our existing innovation
process wouldn’t get us there.”
“When
trust is high,
structure can
be low. When
trust is low,
structure has
to be high.”
When failure shows up, the corporate
CIU leaders in our benchmark group
take responsibility, they take measure,
and then they take action. The most
common actions involve introducing
new elements to the innovation system:
STEP 1: Improve the CIUs
ability to de-risk and avoid false
positives; notably through human-
centered design and early business
model validation
STEP 2: Build connective tissue
between CIU and Core Biz to enable
a softer landing
STEP 3: Add new layers to the
innovation ecosystem, to better
approximate an efficient market for
risk capital deployment
STEP 4: Help sr. leadership
develop a dual-mindset (execution
vs. exploration) so they can lead
appropriately in both parts of
their business
These changes take time, resources, and
leadership patience. The members of the
benchmark group include several firms
that have been practicing roughly the
same form of corporate innovation for
seven years or more. Wholesale changes
often cause (or result from) wholesale
personnel turnover. The benchmark
firms seem to have a cadre of long-
tenured CIU leaders that have stayed the
course. This group of companies exhibits
more grit than flash; their innovation
systems reflect careful evolution, not
dramatic revolution.
ƓPFKPI
It’s not what’s wrong, it’s what’s missing.
CIUs must introduce new elements to form a more
complete innovation system.
12
14. When the first transition-to-scale-up
failures occur – the false positives – most
CIUs respond by creating a tighter filter.
They don’t want another fatally-flawed
concept to get through. They often
embrace more rigorous governance
models, and more explicit hurdle criteria.
But creating a higher wall
doesn’t result in stronger concepts. Each
of the benchmark firms has added new
elements to the incubation process in
their effort to create more transition-
ready concepts. There are three
common types of enhancements:
1. Improved use of HUMAN-CENTERED
DESIGN to ensure the concept is
connected to a valid unmet user
need…as advocated by IDEO and
design thinking
2. Earlier IN-MARKET EXPERIMENTS to
test assumptions…as advocated by
Lean Startup
3. Doing BUSINESS MODEL
VALIDATION in parallel with user
experience validation…as advocated
by the business model canvas
Each of the benchmark firms has used
external consultants as a mechanism
to accelerate the capabilities above.
[Consultants have less relevance,
however, to Finding 6, below.]
These enhancements highlight
the clear difference between
a technology RD lab and a
CIU. The absolute focus on innovation,
and not invention, helps the CIU become
understood as a petri dish where internal
and external inputs – technologies, user
needs, partnerships, business models
– must interact to forge something
new. The activities of the petri dish – as
opposed to inventing – are exploring,
discovering, and de-risking.
ƓPFKPI
As Step 1, CIUs enhance their ability to de-risk new
concepts. They become a better petri dish.
“A minimum
venture team
today is: an
innovation
lead, a technical
architect, and a
finance person.”
“Even our best
prototypes
have to leave
white space
… so our lead
users can fill
the gaps.”
“We work from
an opportunity
towards an
MVP. [The
CIU] role is to
advance the
concept to BU
buy-in or kill.”
“You need an
unusual finance
person to …
think through
the business case
and characterize
the opportunity
concretely.”
13
15. “We go hand-in-hand with the BU
sponsor so the CEO knows
we’re serious.”
“Get your
landing
zones
involved
early …
during Alpha
tests.”
“BUs are happier when they are
exposed to early prototypes.
They end up being part of the
process … and they enhance co-
development.”
“Transition
success comes
from having
champions
who have sat
in consumer’s
homes – not
from higher
[BASES] test
scores.”
In April 2004, HBR published an
article entitled, “The Ambidextrous
Organization” by Charles O’Reilly and
Michael Tushman. The authors argued
for creating a formal exploration unit
to enable large firms to simultaneously
exploit the Core Business and explore
new opportunities. They asserted three
principles (which are borne out by the
CIU structure of our benchmark firms)
for this new ‘ambidextrous organization’:
1. Separate charter and funding
for the exploration unit;
2. Distinct culture and methods; and
3. Tight linkage to the core business at
the Senior Executive Level.
By this definition, 100% of the
benchmark firms reflect an
ambidextrous organization. Based on
the panel discussions, the “tight linkage”
takes many forms, to include:
• Introducing the Core Business to
the CIUs de-risking process…so they
know what they’re getting as output
• Learning the investment
requirements of the Core Business…
so the CIU can generate a concept
that is more investable
• Turning the Core Business from a
customer to a collaborator…to create
skin-in-the-game commitment to new
ventures
We heard again and again how credible
the CIU leader tends to be in the
broader organization. The CIU leader
must get the Core Business invested in
new concepts months or years before
the concept shows up on their doorstep.
In the most mature and successful
innovation groups, the Core Business
involvement includes:
• Authoring the project opportunity via
setting pipeline priorities
• Providing partial staffing
to the project
• Contributing to decision-making
while the concept is in the CIU
• Jointly deciding when the time is
right to transition
• Taking staff from the CIU downstream
into the Core Business for 1-2 years
The people-sharing question is most
intriguing; see Finding 10 for more
on that.
ƓPFKPI
As Step 2, the innovation group must build
connective tissue with the Core Business.
Once a customer, now a collaborator.
14
16. Trying to transition too early won’t work.
But it can be equally untenable to keep
a venture in the CIU after it’s post-
revenue. It might need 20 people, a call
center, and other operating assets that
are beyond the CIUs charter.
What’s needed is a middle way, a
place for growing ventures to go from
post-revenue to post-profit, without
being subjected to the demands of
a Core Business PL. Several of the
more mature benchmark firms are
experimenting with different forms of
this middle way. We see four types
of experiments:
1. Informal middle zones
(exceptions to the rule)
• Repeat an investment phase
within the CIU
• Have special protections with
the Core Business
2. Focus on setting stage-specific
measurements
• Explore-metrics focus
on learning and pivoting
• Grow-stage metrics focus
on customer adoption
• Scale-stage metrics focus
on reaching profitability
3. New development assets
attached to the CIU
• Incubators
• Accelerators
4. Wholly-owned subsidiary models
• Emerging Business Opportunity
(EBO) model or other micro-PL
• Ex: AARP LifeReimagined
One benchmark firm has inserted an
“Accelerate” phase as step 3.5 in its
established model of Originate ¼ Seed
¼ Grow ¼ Graduate ¼ Scale. Another
firm is experimenting with its first formal
EBO. Each of these experiments reflects
a movement toward smoothing out the
bumpy transition to scale-up noted in
Finding 2.
ƓPFKPI
As an emerging Step 3, several CIUs in our study are
experimenting with a middle way. A place to go from
post-revenue to post-profit.
“To develop more
disruptive concepts, we
launched an incubator
a couple of years ago.
Basically, a castle with a
moat around it and draw
bridges that can be dropped
as needed to create critical
connections.”
“Don’t create a
new home unless
it’s a properly new
business. BUs should
be accustomed to and
skilled at raising adjacent
businesses internally.”
“We ended up cutting
some (end-to-end)
solutions in half, to focus
on a single pain point so
the BU manager could get
behind it.” 15
17. Too many projects get too far down
the road before failing, taking too
many valuable resources with them.
Sometimes the expenses of internal
RD scare internal funders away before
they’ve even heard the idea.
It’s not so black white, kill or all-in.
Rather, corporate innovators can be
savvy about using what already exists in
third party solutions and combining with
their company’s capabilities to test a
unique value proposition, inexpensively.
Engaging third parties – “staking” – to
complete the experience is resource
efficient and helps your firm place more
small bets and learn at a fast pace. For
a growth project, making everything
yourself is too risky at this stage, not to
mention costly, so staking reduces risk
as well as the overall burden on the core
business.
From our vantage point, we see that
staking a “little” to pair with the “big”
(your organization) is best practice
for both expediency and control. In
his book The Reciprocity Advantage,
Bob Johansen refers to these as
asymmetrical partnerships. Such a
relationship seems to maximize the
value-shared across all parties.
Staking a partner organization lets
you leverage capabilities that might
take significant time to build in-house
(and you can effectively try them on
for size if you do ultimately want to
build them). Most often, pairing with
a small, post-revenue firm is our first
choice as it offers speed and focus, with
future flexibility. However, if most of the
fulfillment capability can come from
your firm and it’s a top strategic priority
for your business then you should make
it rather than stake it.
Make vs. Stake is another example of
adding a new layer to the innovation
ecosystem. It can be used to smooth an
otherwise lumpy early-stage investment
model.
ƓPFKPI
Another emerging Step 3 is to tap into third party risk
capital and IP. Think of it as Make vs. Stake.
“We sometimes sell an
idea to an external third
party … to create tension
on internal vs. external
value. This puts pressure
on the BU to think
through why they won’t
take something on.”
“We’re starting to
stake third parties
to take on the
parts we think
we might fail at.
It accelerates
the ventures
that otherwise
might be just
out of reach.”
“In the future, the most attractive
partnerships will be asymmetric.
Your new partner is likely to be
an individual or a very small
company.” – Bob Johansen
16
18. Senior leaders have little or no training
in innovation; yet we expect them to
invest confidently and lead decisively
in this arena. Most successful firms in
the study describe a fits-and-starts
relationship with the C-suite before they
hit their stride in leading innovation.
A common story is that the C-suite
shifted from an execution-mindset to a
VC-mindset during the first several years
of the CIU’s existence. Much of the shift
depended upon mutual dialog with the
head of the CIU; it’s as if they learned
together how to operate on different
principles than the Core Business.
Several firms in our panel have CIU
structures explicitly based on a venture
capital model. They anticipate 50%
mortality rates for early stage concepts,
and they place an explicit value on
learning (versus earning).
The challenge that C-Suite leaders face
is: “How do I hold the CIU accountable?
This is real money!” The apparent answer
within the benchmarking group is, “Act
like a VC.” Specifically, this means:
1. Pick a space you believe in
2. Bet the team, not the solution
3. Never give a venture more funding
than you feel you can afford to lose
4. Expect the solution to pivot – quickly!
5. Shut down ventures when the
evidence shows they won’t work
To act like VCs, senior leaders learn
to lead with curiosity, not certainty.
They need to ask questions that are
appropriate for the stage of the venture.
(For example, “How did users respond
to the prototype?”) And they need to
continually ask, “How will you validate
this?” and then, “What did you learn.”
Because in venture investing, learning is
the unit of progress.
As confidence is built, the most crucial
element is trust in the CIU team; they
are the only people for whom failure
makes them more valuable, not less.
When this happens, your senior team
has a VC-mindset.
ƓPFKPI
Step 4 for CIU enhancement is to empower senior
leadership with a dual mindset; lead execution with
certainty, lead exploration with curiosity. Just like a VC.
“We use an investment
council to guide the larger
bets. It’s a venture capital-
type approach to risk.”
“Our innovation
model uses
venture
language:
investment
directors,
ventures, seed
stage, and so
forth.”
“The
transition
phase is
expensive.
Our BUs
fund it in
part during
the transition
year, then (it
exits and) they
fund it in full
afterwards.”
“There needs to be education
for executives on the types of
questions they should be asking.
Innovation requires a customer
validation-first approach, and
that’s not how they learned the
business.”
17
19. “Theater is as important as science for
getting through the gates. That’s why
customer videos are so powerful.”
“It’s great when
[BU staff] come
sit with us for
6 months then
graduate as we
transition the
venture.”
“The BU teams
are on the
hook in our
model, we’re
just coaches,
or sherpas
we like to say.
There’s less
of a sense of
transition.”
“Every [BU]
relationship
is different.
We need to
understand
how they
[make
decisions].
That takes
politically
savvy people.”
“Our staff gets
a choice to
transition with
the venture –
but to a person
they all want
to come back.”
If you want a successful central
innovation unit, then you have
to put the right people on the bus.
Period. And they need to act as soft-
spoken evangelists.
The benchmark panelists are leaders
within some of the world’s most admired
firms, yet each of you is exceedingly
humble. After reading the previous nine
findings, it’s easy to see why.
You deal with ambiguity and failure
at 10X the level that is experienced in
the Core Business. You are sometimes
resented by your peers in the Core
Business, who wonder why the CIU staff
gets to play with cool ideas all the time,
and hire cool design firms, and never
have to show a dime in revenue. And all
the while, you need to remain optimistic
about new possibilities.
Several benchmark panelists even
mentioned that the CIU mostly does not
get credit for concepts that succeed; the
recognition goes to the Core Business
team that commercialized it. So the
staff must learn to embrace their role
as influencers, not owners. You need to
serve, as one benchmark panelist put it,
“as innovation sherpas.”
While the CIU can hire external experts
for other parts of their business process
(e.g., human-centered design, design
thinking, lean startup), the connective
tissue work must be home-grown. The
CIU leader and staff build trust with the
C-Suite and the Core Business clients
slowly, one interaction at a time. A deep
knowledge of the culture is important,
so most of the CIU staff we’ve met
(probably two-thirds) were recruited
from within the company rather than
hired in from outside. And they tend to
have longer tenure than similar roles in
the Core Business. Once you find your
growth whisperers as the CIU, its best to
develop and retain them.
ƓPFKPI
Ultimately, the strongest connective tissue
is human-to-human. The CIU and staff must
serve as growth whisperers.
18
20. All the benchmark firms have
experienced significant failures. All have
struggled mightily with the transition
to scale-up. Yet none has declared
defeat and departed the field. Quite the
opposite is happening; more firms than
ever are investing in innovation labs
based on human-centered design and
lean startup principles.
Why?
1. Growing through incremental
innovation can only address a small
portion of our growth opportunities.
2. MA can supplement that growth in
certain areas, but it is expensive and
risky.
3. Extending our capabilities into
adjacencies and new environments
requires certain resources and assets
that only exist within our firm:
o Deep understanding
of our existing IP
o An insider’s knowledge
of our strategy
o Organizational and cultural
know-how to overcome obstacles
To be a successful growth company,
firms need all three capabilities. The
central innovation unit has evolved
over time, but it has been a persistent
capability at most firms for the past 10-
15 years.
The benchmark firms share another
point of commonality: they are all
veterans at using peer benchmarking
to improve their operating model. CIUs
place value on learning from peers on
a similar journey. Toward that end, we
hope this low-intensity panel discussion
format has deepened each firm’s
understanding. And we hope it points
the way for future adaptations that can
increase the success rate of your new
concepts.
conclusion
Transition-to-scale-up is a wicked problem. So why
are more firms than ever jumping in? Because innovation
is a must-have capability to be a growth company.
“There is no set
rule or template.
One of the
beauties of what
we do is we have
structure but not
rigidity.”
19
21. As part of our analysis, Peer Insight
created an idealized process flow for
the transition to scale-up (see overleaf).
It maps the workflows and decision
rights that help high-potential concepts
make the transition from the CIU to
the operating units. Highlighted in red
are five make-or-break areas where
the more mature firms have made
enhancements.
Use this template to create your own
version. As with any mapping scheme,
you will probably identify gaps and
overlaps. Equally important will be the
conversations that are fostered. Those
conversations are often the first step
in creating connective tissue. There is
no one-size-fits-all solution, of course,
but this tool may help you identify the
key areas of opportunity in your firm’s
approach.
suggested action
To explore the relevance of these findings for your firm,
compare your transition to scale-up process to our
example process (following pages).
20
22. Set Corporate
strategy
Set CIU
strategy
How to
support
Core-70
How to support
Adjacent-20,
Transform-10
Define
risk-investment
model
Define
risk-investment
model
Allocate
resources
Make
operating
plans
Build HCD
capacity
Build external
collaborator
network
Set criteria for
collaborating
with Op Units
Hold
pipeline
sessions
Decide on
investments
Propose
investments
Execute
early stage
explorations
Exploration
Level
(Central
Innovation
Unit)
Corporate
Level
Set Op
Unit strategy
Define
risk-investment
model
Make
operating
plans
Set criteria for
collaborating
with CIU
Hold
pipeline
sessions
Core-70
NPD plans
Influence
investments
Execution
Level
(Core
Business)
Decide on
investments
Influence
investments
Request
additional
funds
Shelve;
report RoL*
Execute
Alpha tests
Contribute to
Alpha tests
Develop Core-70
Plan for
transition
(exit strategy)
Plan for
transition
(exit strategy)
Plan for
transition
(exit strategy)
Shelve;
report RoL*
Decide on
investments
Request
additional
funds
Influence
investments
Execute
Beta tests
Contribute to
Beta tests
Stand-up new
micro PL
Operate new
micro PL
Scale-up 20-10
Scale-up Core-70
OPERATE
Assess
portfolio
performance
Assess
portfolio
performance
Assess
portfolio
performance
sample: transition to scale-up process
Red boxes show where connective tissue enables better investment outcomes
STRATEGY EXPLORATION
(upstream)
PLANNING EXPLORATION
(downstream)
EXECUTION
(transition)
A
B
C
E
D
A
Invest in opportunity spaces, not ideas
Expect to pivot; expect attrition
Value learning; value teams that learn affordably
Think of the Op Unit as the exit strategy
Set a framework for investment stages and accountability
Adopt a VC analogy
How they pick their spots
What level of risk they can tolerate
Define workflows and decision rights
Set priorities (the slate) for the coming year
B Define the Op Unit’s investment requirements Treat internal transition as if it were an acquisition
C
Establish mutual responsibilities for a given venture
Threshold milestones to indicate readiness
Staff consistency during the transition
Year 1 success metrics; Year 1 protections required
Provide closed-loop accountability
E
Refine the risk-investment model
based on venture performance
*RoL: Return on Learning
Treat as middle way, or “scaling lab”
D
Too small to distract the Op Unit; too
strategic to abandon
Fund for 12 months
Set growth (not profit) milestones
Long-term: spin-up or spin-in (not spin-out)
sample: transition to scale-up process
Red boxes show where connective tissue enables better investment outcomes.
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