The document outlines the importance of continuous innovation for businesses to avoid obsolescence, driven by technology, market trends, and competition. It identifies five essential characteristics for fostering innovation within organizations, emphasizing the need for a congruent approach among leadership, strategy, and culture. Each essential is explored in detail, offering frameworks, tools, and insights for successful adaptation and implementation of innovation strategies.

1. INNOVATIVE
ENTERPRISE
ESSENTIALS

2. INNOVATIVE ENTERPRISE ESSENTIALS
Copyright © 2013 by THNK. THE AMSTERDAM SCHOOL OF CREATIVE LEADERSHIP. All rights reserved.
The material in this handbook has been developed for educational purposes only by THNK.
THNK has made its best efforts to give appropriate credit to the various materials used in this book, however in addition
THNK wishes to acknowledge these materials and the respective authors.
ISBN 978-1-291-67398-2

3. 3
INDEX
WILL TO INNOVATE
TRENDS & SIGNALS
56
CUSTOMER DIALOGUE
62
SPARKLING PARTNERSHIPS
69
LEVERAGED TAILWIND
7
INNOVATORS DNA31
INNOVATION CONGRUENCE45
OVERVIEW
EXTERNAL ORIENTATION
RENEWAL MUST37
OVERVIEW
78
TOP TALENT
BIG VISION
INNOVATION SYSTEMS
THREE HORIZONS
85
ORCHESTRATING TEAMS135
SELF ORGANIZING SYSTEMS164
BIPOLAR FOCUS
93
TALENT MAKE AND BUY144
LEARNING LOOPS175
MOEBIUS RING
99
CULT OF INNOVATOR ROCK STAR150
LEVERAGE THE CROWD185
GOVERNANCE HEADROOM
PATIENT FUNDING199
INNOVATION PLAYS
108
156

4. 4
INTRODUCTION
Businesses become obsolete at an ever increasing speed. This is driven by forces like new
technology breakthroughs, drastic shifts in customer needs and market trends and competitors
pushing the productivity frontier or industry disruptors. Some companies have the natural
drive and thrill for innovation but others struggle to sustain growth being unable to renew their
business before it becomes outdated
At THNK, we believe that build industry leadership through innovation and that the ability
of a company to innovate can be deliberately orchestrated. We work with leading global
companies on realizing innovation at scale. Even though some spontaneous innovation
does happen and some leaders seem to be born as idea generators, we have discovered from
our collaborations with entrepreneurs, corporates and in-depth research that continuous
innovation requires a congruent approach between creative leadership, strategy, and
organization. We framed these in 5 essential characteristics that determine whether your
organization can innovate on an ongoing basis
This book covers these 5 essentials in detail. Each essential provides you with a framework
to guide your thinking on innovation, highlights the most critical insights for successful
adaptation and offers you tools to develop and test your ideas before putting these into practice.
The essentials can be worked with on an individual basis, though they will come best to life as
part of a THNK program

5. INNOVATIVE ENTERPRISE ESSENTIALS
Orchestrating teams
Talent make and buy
Cult of innovator rock star
Governance headroom
Three horizons
Moebius ring
Bipolar focus
Innovation plays
Leveraged tailwind
Trends signals
Customer dialogue
Sparkling partnerships
5
Self organizing systems
Learning loop
Leverage the crowd
Patient funding
Innovators DNA
Renewal must
Innovation congruence

6. 6
HOW TO USE THIS BOOK
Essentials follow a standard format to facilitate ease of use and cater to different learning styles:
WHEN NEEDED:
ESSENCE:
KEY INSIGHTS:
TOOL:
FRAMEWORK:
SOURCES:
highlights 2-3 situations when the essential is particularly relevant
describes the framework to guide your thinking
synthesizes the key insights for successful adaptation
provides a model to develop and test your ideas before putting them into practice
describes a basic structure or frame to support your thinking arrount this essential
provides a list of references for more information

7. 7
OVERVIEW
A brief outline of each of the 5 innovative enterprise essentials

8. 8
OVERVIEW
DEFINITION OF INNOVATION
“INNOVATION is the application of new solutions that meet new or existing market needs
- something original, new, and important - in whatever field - that breaks in to a market or
society”
Innovation differs from invention in that innovation refers to the use of a better and, as a result,
novel idea or method, whereas invention refers more directly to the creation of the idea or
method itself
Innovation differs from improvement in that innovation refers to the notion of doing
something different rather than doing the same thing better
Source: Innovation. Wikipedia. 02 December 2013
www.en.wikipedia.org/wiki/Innovation

9. OVERVIEW
9
INNOVATION WITHIN GROWTH
ALLOCATING RESOURCES TO
MARKET SEGMENTS THAT GROW
AUTONOMOUSLY
CONTINUOUS SERVICE
IMPROVEMENT AND PRODUCT
RENEWAL
SYNERGISTIC OR MARKET
CONSOLIDATION ACQUISITIONS
BREAK-THROUGH INNOVATION
(INVENTING AND APPLYING
NEW PRODUCT MARKET
SOLUTIONS OR NEW BUSINESS
MODELS)

10. 10
OVERVIEW - WHY INNOVATE?
IMPORTANCE OF INNOVATION
The market demands innovative new solutions that work much better and can be offered at
much lower cost and burden on society and planet
Innovation is the only escape out of the commodity trap of mature markets with aggressive
competitive pricing
Technology development progresses at neck breaking pace and triggers a constant flow of
break-through innovation opportunities
Creative destruction continues to reduce the expected lifespan of corporations; innovation
leading to continuous renewal and adaptability is required to avoid being outplaced
The best, most entrepreneurial, most future-oriented people want to work on innovations; if
they cannot use the corporate platform to build new opportunities to scale, they leave

11. OVERVIEW - WHY INNOVATE?
STRONG DEPENDENCE ON INNOVATION FOR LONG TERM STRATEGY SUCCESS
Source: Koetzier, W., and Alon, A. Retrieved 2013, from Accenture
www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Why-Low-Risk-Innovation-Costly.pdf
11

12. 12
OVERVIEW - WHY INNOVATE?
PREEMPTING CREATIVE DESTRUCTION
Source: Foster, R., and Caplan, S. “Creative Destruction: Why companies that are built to last underperform the market – and how to successfully
transform them”. Doubleday/Currency, 2001

13. OVERVIEW - WHY INNOVATE?
EXITS
Source picture: Foster, D. Retrieved December, 2013, from Innosight
wwww.innosight.com
13

14. 14
OVERVIEW - WHY INNOVATE?
MOST ENTERPRISES NEED TO GET BETTER AT INNOVATION
PERCENTAGE OF GLOBAL EXECUTIVES WHO AGREE (%)
INNOVATION IS IMPORTANT
TO OUR GROWTH STRATEGY
OUR BUSINESS
MODELS ARE AT RISK
84%
80%
6%
WE ARE SATISFIED WITH OUR
INNOVATION PERFORMANCE
Source: McKinsey Global Innovation Survey
www.mckinsey.com

15. OVERVIEW - WHY INNOVATE?
15
WHERE DOES YOUR COMPANY STAND ON INNOVATION?
DO YOU HAVE A
VISION WHERE AND
HOW TO CREATE A
TOTALLY NEW-TOWORLD BUSINESS?
DOES YOUR
COMPANY SPEND
MORE TIME
LEARNING OUTSIDE
THAN INSIDE?
DOU YOU HAVE A
POOL OF INNOVATOR
TOP TALENT IN YOUR
RANKS?
DOES YOUR COMPANY
HAVE THE STRUCTURE
AND CULTURE FOR RISK
RAKING, AND SMART
FAILURE?
DOES YOUR
COMPANY HAVE
THE URGENT DRIVE
TO CONTINUOUSLY
INNOVATE?

16. 16
OVERVIEW - WILL TO INNOVATE
WHAT IS THE TRADE-OFF THAT YOU MAKE?
Do you accept the dicotomy between short term results and opportunity creation?
In a survey of 400 CFOs 80% stated “they would reduce discretionary
spending on potentially value creating activities in order to meet short term
earnings targets”
Source: The Boston Consulting Group’s Report on Innovation. Retrieved
December, 2011, from The Boston Consulting Group

17. OVERVIEW - WILL TO INNOVATE
17
ESSENCE
Either having passion for ongoing innovation in the “DNA” of the organization or having the
understanding that constant renewal is a must to survive and prosper. The behaviors need to be
congruent with the “will to innovate” throughout all layers of the organization, in words, actions
and values, across all stages of the economic cycle
Innovators DNA
Renewal must
Innovation congruence

18. 18
OVERVIEW - EXTERNAL ORIENTATION
DO YOU RISK DELIVERY MISPERCEPTION?
Source: Bain Company
www.bain.com

19. OVERVIEW - EXTERNAL ORIENTATION
ESSENCE
Being externally orientated as main source for new ideas and best hunting ground for future
opportunities. Including participating in privileged customer dialogues and co-creation,
adapting quickly to trends and market signals, priority presence in growth markets and
venturing with like-minded partners and start-ups with complementary skills and experiences
Leveraged tailwind
Trends signals
Customer dialogue
Sparkling partnerships
19

20. 20
OVERVIEW - BIG VISION
DO YOU STRUGGLE TO MAKE YOUR INNOVATION VISION COMPELLING?
Source: Richard Branson
www.virgin.com

21. OVERVIEW - BIG VISION
EXAMPLE SIMPLE VISION: SOLAR AND WIND PROVIDING ALL POWER FOR EU
Source: www.sciencedirect.com, THNK analyses
21

22. 22
OVERVIEW - BIG VISION
AND DOES YOUR INNOVATION VISION LACK SOCIAL RELEVANCE?
“People are seldom motivated by a numbers based story. Occasionally (but not nearly often
enough) organizations tell a change story related to the individual’s passion or purpose (“what
is in it for me”). Seldom do they tell a change story related to impact on society, the customer,
or the team”
Source Picture: Sunni Brown
www.sunnibrown.com

23. OVERVIEW - BIG VISION
ESSENCE
Having a clear vision for the “next big thing”. It builds on the current strengths, translates into a
serious investment commitment, combines societal and economic value, provides direction
to short term actions still providing some optionality. It leverages innovation plays like either
technology, consumer insight or business model disruption
Three horizons
Moebius ring
Bipolar focus
Innovation plays
23

24. 24
OVERVIEW - TOP TALENT
DO YOU LACK APPEAL TO INNOVATION TALENT?
SCALABLE STARTUP
CEO’S
PERSONAL
CONTRIBUTION
LARGE COMPANY
ENTREPRENEURIAL-DRIVEN LEARNING
AND DISCOVERY
PROCESS-MANAGED EXECUTION AND GROWTH
SUPERSTAR
MANAGER OF PLANS, GOALS, PROCESS, AND PERSONNEL
CEO’S
PERSONAL
CONTRIBUTION
24/7
LONG TERM 9 TO 5
PLANNING
OPPORTUNISTIC AGILE
PROCESS-, AND GOAL-DRIVEN
PROCESS
HATES AND ELIMINATES
IMPLEMENTS AND USES
MANAGEMENT
STYLE
AUTOCRATIC, STAR SYSTEM
MAY BE BUREAUCRATIC
SPAN OF
CONTROL
HANDS-ON
DISTRIBUTED DOWN THE ORGANIZATION
FOCUS
HIGH AND PASSIONATE VISION
EXECUTION
UNCERTAINTY/
CHAOS
BRINGS ORDER OUT OF CHAOS
FOCUSES ON REPEATABILITY
Source: Steve Bank
www.stevebank.com

25. OVERVIEW - TOP TALENT
25
ESSENCE
Ensuring the organization nurtures, attracts and protects “ innovation super stars” – the
individual innovation super stars that will take the risks, and “break the eggs” to eventually
make innovations happen - and allows them to orchestrate strong creative teams around them
Orchestrating teams
Talent make and buy
Cult of innovator rock star
Governance headroom

26. 26
OVERVIEW - INNOVATION SYSTEMS
ARE YOU PLUGGED IN CO-CREATION NETWORKS?
Source: McKinsey Company
www.mckinsey.com

27. OVERVIEW - INNOVATION SYSTEMS
ESSENCE
Organizing the company into innovation projects and ventures , with tracking systems that
stimulate risk taking, smart failures, learning and improvement, that leverage the wisdom and
insights from the entire organization , customers and suppliers, and are fueled with patient
funding
Self organizing systems
Learning loop
Leverage the crowd
Patient funding
27

28. 28
OVERVIEW
UNDERLYING INNOVATIVE ENTERPRISE ESSENTIALS
Orchestrating teams
Talent make and buy
Cult of innovator rock star
Governance headroom
Three horizons
Moebius ring
Bipolar focus
Innovation plays
Leveraged tailwind
Trends signals
Customer dialogue
Neue Kombinationen
Self organizing systems
Learning loop
Leverage the crowd
Patient funding
Innovators DNA
Renewal must
Innovation congruence

29. 29
WILL TO INNOVATE
Either having passion for ongoing innovation in the “DNA” of the organization or
having the understanding that constant renewal is a must to survive and prosper.
This will to innovate needs to be congruent through the different layers of the
organization, between words and action and across the economic cycle

30. 30
WILL TO INNOVATE OVERVIEW
INNOVATORS DNA
RENEWAL MUST
INNOVATION
CONGRUENCE
Some enterprises have the natural
drive to innovate, with creativity in
their DNA and as a core element
in the culture. This coincides
with high expectations from all
stakeholders
Enterprises have to constantly
reinvent themselves to avoid
withering away. Business
models become obsolete at
an increasing speed, driven by
technology breakthroughs,
market developments and other
competitions
To realize successful innovation
requires commitment from the top
and congruence “talk and walk”
PAGE 31
PAGE 37
PAGE 45

31. 31
INNOVATORS DNA
SOME ENTERPRISES HAVE THE NATURAL DRIVE TO
INNOVATE, WITH CREATIVITY IN THEIR DNA AND AS CORE
ELEMENT IN THE CULTURE. THIS COINCIDES WITH HIGH
EXPECTATIONS FROM ALL STAKEHOLDERS
“I think that our investors value our innovative efforts,
but am not sure how to measure it”
“We spend all our time on managing the current wave of
success”
“We had one great hit, but we don’t have any new ideas
in the pipeline”

32. 32
INNOVATORS DNA
ESSENCE: INTRINSIC PUSH AND EXTERNAL PULL
Company drive
External expectations
“We brought you the iPhone”
“We invented Post-its”
“We dreamt up “Big Brother” and
“Deal or No Deal”
Enterprise value (market cap + debt)
Intrinsic drive and external expectations should coincide
Note: Walmart was listed on nr. 20 in the BCG report “The most innovative companies 2012”
Source: Wal-Mart Stores Inc. (WMT). Retrieved December 4, 2013, from Yahoo! Finance
www.finance.yahoo.com/q/ks?s=WMT

33. INNOVATORS DNA
33
KEY INSIGHTS: EXAMPLES OF INNOVATORS PREMIUM
THE WORLD’S MOST INNOVATIVE COMPANIES
(RANKED BY INNOVATION PREMIUM AVERAGE 2005-2009)
RANK
COMPANY NAME
INDUSTRY/KEY BUSINESSES
INNOVATION PREMIUM
1
SALESFORCE.COM
CLOUD COMPUTING
SOFTWARE
73%
2
INTUITITIVE SURGICAL
DA VINCI SYSTEM ROBOTS FOR
SURGERIES
64%
3
AMAZON.COM
ONLINE DISCOUNT RETAILER,
KINDLE, CLOUD COMPUTING
57%
4
CELEGENE CORP.
PHARMACEUTICALS
55%
5
APPLE
COMPUTERS, SOFTWARE,
MUSIC DEVICES, PHONES,
ETC.
52%
6
GOOGLE
SOFTWARE, PRIMARILY
FOR INFO RETRIEVAL (E.G.,
SEARCH)
49%
7
HINDUSTAN LEVER1
HOUSEHOLD PRODUCTS
47%
8
RECKITT BENCKISER GROUP
HOUSEHOLD PRODUCTS
44%
9
MONSANTO CO.
SEEDS, GENETICALLY
MODIFIED SEEDS, CORP
PROTECTION
44%
10
BHARAT HEAVY ELECTRICALS
ELECTRICAL EQUIPMENT
44%
: Unilever Heavy Electricals
1
Source: Holt and The Innovator’s DNA LLC.

34. 34
INNOVATORS DNA
KEY INSIGHTS: ONLY THE NEXT BREAK THROUGH COUNTS
The innovator’s DNA has to be constantly nourished and re-established
Source Picture: Baekdal, T. Retrieved June 14, 2013, from Baekdal.com
www.baekdal.com/insights/understanding-change-and-predicting-trends

35. INNOVATORS DNA
35
TOOL: ALLOCATION OF INNOVATION BUDGET TO THREE CATEGORIES
EXISTING BUSINESS
IMPROVEMENT
NEW-TO-COMPANY
PRODUCT LINE
EXTENSIONS
NEW-TO-WORLD
PRODUCT
INVENTIONS

36. 36
INNOVATORS DNA
SOURCES
READING
VIDEO
The most innovative companies 2012,
The state of the art in leading industries,
BCG
Google logic: why Google does the things
it does the way it does, The guardian, July
2013
www.guardian.co.uk/technology/2013/
jul/09/google-android-reader-why?
Jeff Bezos: Lessons to Learn from a Failing
Business
www.youtube.com/
watch?v=rOteo4IARgw
The Innovator’s DNA: Mastering the
Five Skills of Disruptive Innovators, by
Jeff Dyer, Hal Gregersen, Clayton M.
Christensen, 2011

37. 37
RENEWAL MUST
ENTERPRISES HAVE TO CONSTANTLY REINVENT
THEMSELVES TO AVOID WITHERING AWAY. BUSINESS
MODELS BECOME OBSOLETE AT AN INCREASING
SPEED, DRIVEN BY TECHNOLOGY BREAKTHROUGHS,
MARKET DEVELOPMENTS AND OTHER COMPETITIONS
“We have been in this business for years, nothing to
worry about”
“We still have a steady cash flow so nobody seems to
care about innovation”
“We are the market leader, so little to worry about”

38. 38
RENEWAL MUST
ESSENCE: INNOVATE CONTINUOUSLY
Need to constantly innovate to avoid withering away
TRADITIONAL LOGIC
MARKET
GROWTH
MARKET
MATURITY
CURRENT WORLD
MARKET
DECLINE
CONTINUOUS
INNOVATION

39. RENEWAL MUST
ESSENCE: SUSTAINING GROWTH IS HARD TO DO
Source: Donald, L., Doz, Y., and Sheer, C. Retrieved May, 2006, from Harvard Business Review
www.hbr.org/2006/05/creating-new-growth-platforms/ar/1
39

40. 40
RENEWAL MUST
KEY INSIGHTS
Traditional logic was to innovate when the market started to decline; the new prevailing logic is
to innovate continuously
Growth projections of a few innovations get inflated, leading to making large expenses at early
stages. Instead, start with small investments and demand early success to profitability
Create an innovation pipeline that is balanced in terms of diversity in timing, size, riskiness and
type of innovation. The chance of finding the next big opportunity is largely a function of how
many seeds one sows

41. RENEWAL MUST
KEY INSIGHTS: AVOID THE GROWTH GAP
Avoid the vicious cycle resulting from waiting too long
Source: Christensen, C., and Raynor, M. Retrieved September 3, 2003, from Harvard Business Review
www.hbr.org/product/there-is-good-money-and-there-is-bad-money/an/1545BC-PDF-ENG
41

42. 42
RENEWAL MUST
KEY INSIGHTS: A THICK AND BALANCED INNOVATION PIPELINE
Source: Innovation in Consumer Products: New products from concept to launch. Retrieved 2008, from Accenture
www.accenture.com/SiteCollectionDocuments/PDF/ConsumerProductsGroupPoV_103008_fnl.pdf

43. RENEWAL MUST
TOO: A BALANCED PORTFOLIO
43

44. 44
RENEWAL MUST
SOURCES
READING
VIDEO
Creating new growth platforms. Harvard
Business Review, May 2006
Business model innovation, BCG,
December 2009
AMCF Horizon Series: Strategy Thought
Leaders Define Strategy
www.youtube.com/watch?v=0JyRXpYFIc
gfeature=youtube_gdata_player
Professor Richard Rumelt : What is Good
Corporate Strategy?
www.youtube.com/
watch?v=43kZDnyDXOc
Profit From The Core , Harvard Business
School Press, 2001
Winnovation - 5 ways to improve your
innovation pipeline
www.talarforum.se/artikel/rowan.
gibson/236/236/winnovation_5_
ways_to_improve_your_innovation_
pipeline.html

45. 45
INNOVATION CONGRUENCE
TO REALIZE SUCCESSFUL INNOVATION REQUIRES
COMMITMENT FROM THE TOP AND CONGRUENCE:
“TALK AND WALK”
“They say that innovation is important, but our leaders
aren’t interested of the latest technologies”
“Whenever I want to do a small experiment, I need to get
10 approvals and everybody is afraid of failure”
“Our values don’t stimulate any dialogue, it is more follow
what you are told”

46. 46
INNOVATION CONGRUENCE
KEY INSIGHTS
Congruence comes in several forms:
Translating innovation and growth vision into actual investments at risk
The leadership behaviors, demonstrating that innovation is valued through symbolic
actions, e.g. promoting innovation leaders who experienced entrepreneurial failure
Recruiting and capability building oriented to creativity, innovation, entrepreneurship and
risk taking
Metrics and rewards that stimulate behavior innovation and risk taking, e.g. Tracking and
rewarding new product revenues instead of total revenues

47. INNOVATION CONGRUENCE
KEY INSIGHTS: DEMONSTRATE THAT INNOVATION IS IMPORTANT
Source Picture: 10 business cases for CEOs to use social media. Retrieved June 20, 2013, from Arikhanson.com
www.arikhanson.com/2013/06/20/10-business-cases-for-ceos-to-use-social-media/
47

48. 48
INNOVATION CONGRUENCE
KEY INSIGHTS: CREATE THE RIGHT MINDSET
Develop appropriate mindsets towards risk and smart failure
At Google, Sheryl Sandberg made a bad decision costing millions of dollars. Co-founder
Larry Page responded:
“I’m so glad you made this mistake, because I want to run a company where we are moving
too quickly and doing too much, not being too cautious and doing too little. If we don’t have
any of these mistakes, we’re just not taking enough risk”
Source Picture: Official Logo of Google, Inc.Trademark and Website. Retrieved November, 2013, from Wikimedia
www.commons.wikimedia.org/wiki/File:Logo_Google_2013_Official.svg

49. INNOVATION CONGRUENCE
KEY INSIGHTS: EMBED INNOVATION VALUES
Source: Prokesch , S. How GE Teaches Teams to Lead Change. Retrieved January, 2009, from Harvard Business Review
www.ge.com/pdf/innovation/leadership/hbr_crotonville.pdf
49

50. 50
INNOVATION CONGRUENCE
KEY INSIGHTS: INSTALL THE RIGHT METRICS
Measure the innovation outputs, not the process (which is ugly)
Innovation strategy
vision e.g. contribution
of innovation to top-line
growth
Innovation process e.g.,
Net Promoter Score of
new concepts
Innovation pipeline e.g.,
e.g., overlap of portfolio
with vision in terms
of time, risk, size and
innovation type
Innovation leadership
commitment e.g.,
leadership time and funds
dedicated to innovation
Innovation skills and
culture e.g., % of time
spent with customers
Portfolio and project
management: Conversion
rate of ideas to profitable
projects, availability of key
resources
Innovators premium e.g.,
revenue and profit from
new products or services,
raking in top X of mostinnovative companies
Customer feedback e.g.,
customer satisfaction of
new products or services
Contribution to business
growth: positive ROI on
innovation
Source: Innovation Performance Measurement – Assessing and Driving the Innovation Performance of Companies. Retrieved January, 30, 2013,
from Detecon Consulting
www.innovationcenter.deteconusa.com/articles/innovation-performance-measurement-assessing-and-driving-the-innovation-performance-ofcompanies/

51. INNOVATION CONGRUENCE
51
FRAMEWORK: THNK INNOVATION CHANGE FRAMEWORK
Make innovation a critical part of your
growth vision and select the most
promising innovation plays
Build leaders that role model innovation
and build innovation capabilities through
tools and techniques
Make innovation a critical part of your
growth vision and select the most
promising innovation plays

52. 52
INNOVATION CONGRUENCE
FRAMEWORK: THNK INNOVATION CHANGE FRAMEWORK - EXAMPLES
Set-up time for external orientation among
all executives and managers (more time for
sensing)
Commit to a visioning journey with all
stakeholders involved over the course of 1-2
years
De-couple investments in innovation from
short term variability and earnings
Allocate substantial senior executive time on
innovation
Undertake an innovation challenge project
with the organization involved on a wider
societal project
Hire edgy external creative talent and put in leadership
positions before their age
Invest in technology skills in most relevant areas
Adopt concepting design methodologies
Reduce hierarchy and internal bureaucracy to foster
entrepreneurship
Put innovation success in KPI’s

53. INNOVATION CONGRUENCE
53
SOURCES
READING
VIDEO
Encouraging organizations to change: The
influence model, 2011, Colin Price
The inconvenient truth of change
management , 2000, Scott Keller and
Carolyn Aiken
Change Management - 30-Second
Management Training Course
www.youtube.com/watch?v=fpuHUiy_
xogfeature=youtube_gdata_player
Leadership training and change
management
www.youtube.com/watch?v=cB2vOmuzOgfeature=youtube_gdata_
player
Its not what you sell, it’s what you stand
for, Roy Spence
www.itsnotwhatyousell.com
Giving voice to values, Mary C. Gentile
The Innovator’s DNA: Mastering the
Five Skills of Disruptive Innovators,
Jeff Dyer , Hal Gregersen , Clayton M.
Christensen, Mel Foster
Innovation metrics
www.innovation-point.com/
innovationmetrics.htm
IBM iForum - Rethinking Innovation
Measurement by Dean Spitzer

54. 54
EXTERNAL ORIENTATION
Being externally orientated, resulting in privileged customer dialogue and cocreation, adapting quickly to trends and market signals, priority presence in
growth markets and venturing with like-minded partners with complementary
skills and experiences

55. EXTERNAL ORIENTATION OVERVIEW
55
TRENDS
SIGNALS
CUSTOMER
DIALOGUE
SPARKLING
PARTNERSHIPS
LEVERAGED
TAILWIND
Openness to uncertain
trends and weak signals
increases the probability
of a serendipitous insight
on opportunity spaces
and most attractive
hunting grounds
Innovation needs to
meet customer needs,
but in surprising new
ways that will not emerge
from simply asking the
customer what he or she
wants
Innovation partnerships
aim not so much for
synergy but for a creative
spark between two
literacies, two sets of
capabilities, two worlds of
experience
Focus on market
opportunities that are in a
growth window and take
advantage of the resulting
momentum; or renew a
market that is shrinking
with a break-through
innovation
PAGE 56
PAGE 62
PAGE 69
PAGE 78

56. 56
TRENDS SIGNALS
OPENNESS TO UNCERTAIN TRENDS AND WEAK SIGNALS
INCREASES THE PROBABILITY OF A SERENDIPITOUS
INSIGHT ON OPPORTUNITY SPACES AND MOST
ATTRACTIVE HUNTING GROUNDS
“For market research, we have default, automated set of
data that we collect to get new insights”
“I don’t have time to look at any other materials outside
of work”
“We are in execution mode now, we need to focus on
optimization – trends aren’t that important”

57. TRENDS SIGNALS
KEY INSIGHTS: MEGA TRENDS ARE PARAGDIGM SHIFTS
The world is complex and uncertain: inspiration for innovation results from being open to
contrary and surprise insights, the unusual news and disturbing information
The certain trends and the consistent signals only serve to continue the existing business
Examples of a few megatrends (THNK Paradigm Shifts)
Source: THNK Paradigm Shifts
www.thnk.org
57

58. 58
TRENDS SIGNALS
KEY INSIGHTS: “WEAK SIGNALS” HAVE A PATTERN
NOISE (RANDOM)
START OF
UPSWING IN
THE ECONOMY
DAILY VARIATION IN JOB ADVERTISEMENTS
NEW
CUSTOMER
TREND E.G.
SPIRITUALITY
NEWS ARTICLES
NEW
TECHNOLOGY
TREND
SCIENTIFIC ARTICLES
ILLUSTRATION
WEAK SIGNALS (PATTERNS)
INCREASING SHARE IN IT JOB ADVERTISEMENTS
AMOUNT OF ATTENTION IN GLOSSARIES, SEARCH
VOLUME
ACCUMULATION OF VC INVESTMENTS

59. TRENDS SIGNALS
KEY INSIGHTS: OTHER PLAYERS AS SOURCE OF WEAK SIGNALS
Southwest Airlines, a leading US budget airline, has
viewed the car and bus as its competitors and thereby
focused on offering inexpensive, frequent flights
between urban centres separated by 500 miles or
less. Short-haul, point-to-point flying however puts
greater physical stress on aircraft, adds to maintenance
costs and increases aircraft time on the ground which
is non-revenue producing time. To overcome these
disadvantages, Southwest Airlines has pursued a
number of operating strategies:
Strong focus on turning aircraft around quickly so
as to minimize time on the ground. This has required strong cross-functional collaboration
among pilots, gate agents, mechanics, fuelers, cleaners, caterers and others
Standardizing on one single operating platform – the Boeing 737 – and aligning as far as
possible all Standard Operating Procedures for these aircraft over time
Using less congested airports close to big urban centers – such as Dallas’ Love Field or
Chicago’s Midway – to avoid delays from using congested hubs
Radically limiting customer services, from on-board meals to advanced seat selection, to
reduce operational complexity and cost
Source Picture: JetBlast. Retrieved August 31, 2012, from Wikipedia
www.en.wikipedia.org/wiki/File:Southwest_Airlines_Logo.png
59

60. 60
TRENDS SIGNALS
TOOL: EXTERNAL ORIENTATION SURVEY
SURVEY FOR THE TEAM - QUESTIONS TO ASK YOURSELF
WE HAVE A CLEAR VIEW ON THE MAJOR 3-5 TRENDS AND DO A GOOD JOB IN
DEFINING THE POSSIBLE OPPORTUNITIES AND THREATS FOR OUR BUSINESS?
WE ARE OPEN TO AND IDENTIFY WEAK SIGNALS FROM THE MARKETS ABOUT THE
FUTURE TRENDS?
WE HAVE FREQUENT, CASUAL DIALOGUES WITH USERS THAT FORM THE BASIS
FOR UNDERSTANDING WHAT THEY VALUE MOST?
OFTEN NEW IDEAS OR INSIGHTS ARE A SPIN-OFF FROM SUGGESTIONS IN THE
MARKET?
WE ARE UP TO SPEED TO WHAT COMPETITORS DO IN THE INNOVATION SPACE AS
SOURCE FOR DIFFERENTIATION, INNOVATION AND POSSIBLE PARTNERSHIPS?
WE MAKE USE OF SOCIAL MEDIA AND LEVERAGE THE CROWD TO UNDERSTAND
WHAT IT VALUES MOST?
WE MAINTAIN STRONG RELATIONSHIPS WITH VARIOUS STAKEHOLDERS E.G.,
COMMUNITIES, GOVERNMENTS, REGULATORS?
STRONGLY
DISAGREE
DISAGREE
NEUTRAL
AGREE
STRONGLY
AGREE

61. TRENDS SIGNALS
61
SOURCES
READING
VIDEO
Harvard Business School: How can big
companies keep the entrepreneurial spirit
alive?
N/A
Harvard Business School case study:
Innovation and Collaboration at Merrill
Lynch
INSEAD case study: Transforming DNV:
From Silos to Disciplined Collaboration
across Business Units – Changes at the
Top
The Conference Board: The
entrepreneurial flame: How to keep it
burning brightly in your company?
IDEO workshop for techstars
www.slideshare.net/thulme/ideoworkshop-for-techstars?
Trend Watching
www.trendwatching.com

62. 62
CUSTOMER DIALOGUE
INNOVATION NEEDS TO MEET CUSTOMER NEEDS, BUT
IN SURPRISING NEW WAYS THAT WILL NOT EMERGE
FROM SIMPLY ASKING THE CUSTOMER WHAT HE OR
SHE WANTS
“I know that our product is good, the customer just still
has to discover how to best use it”
“You need to measure stuff – focus on the quantitative
data”
“As we know, it is more a push than a pull market”

63. CUSTOMER DIALOGUE
ESSENCE: MEETING CUSTOMER NEEDS IS CRUCIAL FOR INNOVATION
Reasons cited for failure of new products, %
Source: Innovation in consumer products. Retrieved 2008, from Accenture
www.accenture.com/SiteCollectionDocuments/PDF/ConsumerProductsGroupPoV_103008_fnl.pdf
63

64. 64
CUSTOMER DIALOGUE
KEY INSIGHTS: LISTENING IN GIVES VERY DIFFERENT CLUES
Example: customer research on diapers - survey vs. online dialogue
Source: Nielsen McKinsey Incite

65. CUSTOMER DIALOGUE
KEY INSIGHTS: MARKET RESEARCH IS NOT ENOUGH
Customers...
often have trouble articulating their unmet
needs
rarely have a clue why they do what they do
do not tell the truth
and rarely know what novel products and
services they would crave for, if only they knew
all possibilities that existed and had experience
with these
Source Picture: Retail prophet consulting
65

66. 66
CUSTOMER DIALOGUE
KEY INSIGHTS: WHO FOLLOWS THE USER BREAKING FREE?
Desired customer paths often deviate from the
paths as designed by the architect and usually
represents the shortest or most easily navigated
route between an origin and destination
How flexible do you think the architect is to change
his design and follow the preferences of the users?
Source Picture: The gentle author. Retrieved August 16, 2012, from Spitalfields life
www.spitalfieldslife.com/wp-content/uploads/2012/08/IMG_2244.jpg

67. CUSTOMER DIALOGUE
TOOL: USER INSIGHT AND FORESIGHT TOOLS
Source: THNK Concepting Flow
www.thnk.org
67

68. 68
CUSTOMER DIALOGUE
SOURCES
READING
VIDEO
The customer’s voice. Why are we so bad
ad hearing it? BCG
www.bcg.com/documents/file35167.pdf
Innovation in Consumer products,
Accenture, 2008
www.accenture.com/
SiteCollectionDocuments/PDF/
ConsumerProductsGroupPoV_103008_
fnl.pdf
Why I brought PacMan to Moma
www.ted.com/talks/paola_antonelli_
why_i_brought_pacman_to_moma.
html
Malcolm Gladwell: Choice, happiness
and spaghetti sauce
www.ted.com/talks/malcolm_gladwell_
on_spaghetti_sauce.html
The Power of Habit Why We Do What
We Do in Life and Business
www.youtube.com/
watch?v=a6p3lG9EDXw
Understanding change and predicting
trends
www.baekdal.com/insights/
understanding-change-and-predictingtrends/
Why we’re so bad at predicting the future
www.venturevillage.eu/predicting-future

69. 69
SPARKLING PARTNERSHIPS
INNOVATION PARTNERSHIPS AIM NOT SO MUCH FOR
SYNERGY BUT FOR A CREATIVE SPARK BETWEEN TWO
LITERACIES, TWO SETS OF CAPABILITIES, TWO WORLDS
OF EXPERIENCE. SCHUMPETER CALLS THIS “NEUE
KOMBINATIONEN”
“We do all our development in-house”
“We really struggle to build competitive advantage by
partnering with externals”
“Whenever we partner, we don’t really have a clear
added value or approach identified – it is more random”

70. 70
SPARKLING PARTNERSHIPS
ESSENCE: A COMPLEMENTARY COMBINATION
Company: An
international coffee and
coffeehouse chain
Contributions: Most
influential and recognized
brand for coffee drinks
Win: Brand extension,
capacity building, and
access to know-how that
fueled subsequent growth
and drove the creation of
other JVs. E.g., ice cream
partnership with Dreyers
Grand ice cream
Source Pictures: www.starbucks.com , www.pepsico.com
Company: A global
500 company active
in manufacturing,
marketing, and
distribution of snacks
and beverages in 200
countries
Contributions:
Well-established
manufacturing and
distribution channels
Win: Successful extension
into new product market
with reduced risk and
cost than go-alone

71. SPARKLING PARTNERSHIPS
KEY INSIGHTS: “UPWARD MARRIAGE”, PARTNERS OF BEST CHOICE
Red Bull, as a company, is all about
creativity, innovation, and doing things
differently, which is what Red Bull
Racing shares
It takes a completely different approach
to Formula One and offers partners the
ability to make their sponsorship come
alive – to create something people will
remember and gravitate toward
It tries to open up the possibilities, not
restrict the partners. It creates value
streams for partners in addition to those
normally associated with Formula
One, allowing them to exploit rights in
interesting and unusual ways
It is a premium sponsorship
opportunity, dedicated to working
with a small number of partners – with
the relationships based on creativity
and innovation – so that they gain
maximum benefit from the cooperation
Source Picture: Partnerships a team-building exercise. Retrieved November, 2013, from Red Bull
www.redbull.com/cs/Satellite/en_INT/Red-Bull-Racing-Partners/001242811070589
71

72. 72
SPARKLING PARTNERSHIPS
KEY INSIGHTS: THINK BROAD ABOUT POSSIBLE PARTNERSHIPS
Partnerships with venture capital firms
Benefits for VCs: Insight in market attractiveness,
commercialization viability, path to exit
Benefits for company: Insight in innovations, opportunity to
buy in early on, expand deal flow and network, great source for
innovation opportunities
Example: PG serves as a strategic partner for clean-tech
sector of VantagePoint
Partnerships with experts/academic institutions
Benefits for academic institution: Increased funding, facilities,
capabilities
Benefits for company: Access to cutting-edge and academic
research
Example: Unilever invested more than £13mn to establish
a world-leading research group in Cambridge, chemistry
department in emerging field of molecular informatics
Partnerships with suppliers
Benefits for supplier: Guaranteed volumes, control over supply
chain
Benefits for company: Discount on procurement; no need to
integrate upstream
Example: Green Giant, vegetable producer, partnered with
Seneca, processor of canned foods
Source Pictures: www.pg.com , www.v pcp.com , www-ucc.ch.cam.ac.uk , www.greengiant.com , www.senecasnacks.com

73. SPARKLING PARTNERSHIPS
ESSENCE: STRATEGIC FIT IS ONLY ONE CRITERIA
Example: JV assessment framework used by Lilly
Source: www.lilly.com
73

74. 74
SPARKLING PARTNERSHIPS
TOOL: IP NETWORK MAPPING
Source: McKinsey Company
www.mckinsey.com

75. SPARKLING PARTNERSHIPS
75
TOOL: INNOVATION PARTNERSHIP CURRENCIES (1/2)
CURRENCY TYPE
RATIONALE FOR COMPANY
COINVESTMENT
ACCELERATE PROCESS
ACCESS TO CAPITAL
JOINT VENTURE
FINANCIAL SUPPORT
WHAT OTHERS MIGHT VALUE
SECURE ACCESS AND/OR
OWNERSHIP OF STRATEGIC
SOURCE OFVALUE
ACCELERATE PROCESS
EQUITY INVESTMENT
(MINORITY STAKE,
ACQUISITION)
REDUCE RISK AND COSTS
SECURE ACCESS AND/OR
OWNERSHIP OF STRATEGIC
SOURCE OF VALUE
COST SHARING
RATIONALE FOR PARTNER
REDUCE RISK AND COSTS
PAY FOR SERVICES
OISTRIBUTION NETWORK
(SCALE)
CHANNELS
POTENTIAL TO MONETIZE
FLXED COSTS IN
DISTRIBUTION AND CUSTOMER
RELATIONSHIPS
ACCESS TO DISTRIBUTION
NETWORK
ACCESS TO CUSTOMERS
(ACCESS)
ACCESS TO NEW
RELATIONSHIPS
SALESFORCE
LEVERAGE NEW CAPABILITIES
LICENSING
LOWER SGA AND MARKETING
COSTS
COMARKETING
LEVERAGE EXISTING
PARTNERSHIPS
ACCESS TO NEW PARTNERS
MANUFACTURING
CAPABILITIES (SCALE, CAPEX)
BRAND AND
RELATIONSHIPS
FIT WITH BRANDS WHILE
REDUCING UPFRONT
INVESTMENT
DRIVE PLANT UTILIZATION
REDUCE UPFRONT CAPEX
INVESTMENT
RESOURCES (E .G ., RD,
FINANCE)
HELP DRIVE VALUE FROM
FIXED COSTS
ACCESS NEW
MANUFACTURING
CAPABILITIES
COBRANDING (BRAND EQUITY)
FACILITATE INTERACTION WITH
OTHER PARTNERS
PHYSICAL ASSETS
LAB/OFFICE SPACE
LEVERAGE SCALE
LEVERAGE EXPERTISE

76. 76
SPARKLING PARTNERSHIPS
TOOL: INNOVATION PARTNERSHIP CURRENCIES (2/2)
CURRENCY TYPE
RATIONALE FOR COMPANY
TECHNOLOGY, LP
MONETIZE EXISTING
INSIGHTS, PROPRIETARY
KNOWLEDGE , TECHNOLOGY
ACCESS TO NEW INSIGHTS
PROPRIETARY KNOWLEDGE,
TECHNOLOGY
CONSUMER INSIGHTS
OVERLAP OF CONSUMER
SEGMENT
OVERLAP OF CONSUMER
SEGMENT
INTERNAL RECOGNITION
ENERGIZE INTERNAL EFFORT
STRENGTHEN PARTNERSHIP
MEETINGS WITH SENIOR
LEADERS
LOW COST INVESTMENT
POTENTIAL ACCESS TO
ADDITIONAL KNOW-HOW AND
PARTNERSHIPS
INVITATION TO FORUM , TRADE
SHOWS
STRENGTHEN PARTNERSHIP
ACCESS TO INTEMAL FORUM
KNOW-HOW
WHAT OTHERS MIGHT VALUE
RATIONALE FOR PARTNER
FACILITATE CROSS PARTNER
COMMUNICATION
SHARED VALUE AND MISSION
BUILD OR STRENGTHEN
COMMUNITY AROUND SHARED
SET OFVALUES
INDUSTRY EXPERTISE
FUNCTIONAL CAPABILITIES
RECOGNITION
KNOW-HOW AND
PARTNERSHIPS
ENGAGE OWN COMMUNITY
AROUND SHARED SET OF
VALUES

77. SPARKLING PARTNERSHIPS
77
SOURCES
READING
VIDEO
Creating new growth platforms. Harvard
Business Review May 2006
Managing Alliances with the Balanced
Scorecard. Harvard Business Review,
2010
Clay Shirky: Institutions vs. collaboration
www.ted.com/talks/clay_shirky_on_
institutions_versus_collaboration.html
OECD patent database
www.oecd.org/sti/inno/
oecdpatentdatabases.htm

78. 78
LEVERAGED TAILWIND
FOCUS ON MARKET OPPORTUNITIES THAT ARE IN
A GROWTH WINDOW AND TAKE ADVANTAGE OF THE
RESULTING MOMENTUM; OR RENEW A MARKET THAT IS
SHRINKING WITH A BREAK-THROUGH INNOVATION
“We only look at the general market trends, it’s not worth
it to zoom in into smaller markets”
“Our market is shrinking, but it will take a long time before
it is gone – no need to worry”
“We always tend to be unlucky – launching the product
where it is not relevant”

79. LEVERAGED TAILWIND
KEY INSIGHTS
Flying against the wind, swimming against the tide is incredibly difficult – so is growth in
declining markets
These markets are prone to be replaced by new entrants with innovations
Markets that do grow provide the room and expectation for ongoing innovation – this is a
major driver for enterprise growth
At the granular product/market/geography - segment level differences in growth are very
significant - for every “dog” there is an adjacent “star”
79

80. 80
LEVERAGED TAILWIND
KEY INSIGHTS: SWIMMING AGAINST THE TIDE IS DIFFICULT
On the verge of losing billions of dollars in revenue, U.S. Postal Service launched a campaign to
warn about the dangers of email and proposed paper-mail as a safer alternative
Source: Postal Service launches new ad campaign promoting snail mail. Retrieved September 29, 2011, from Washington Post
www.washingtonpost.com/posttv/business/economy/postal-service-launches-new-ad-campaign-promoting-snail-mail/2011/09/29/gIQAZJBB8K_video.html

81. LEVERAGED TAILWIND
FRAMEWORK: GROWTH OPPORTUNITIES ARE GRANULAR
Source Picture: Matheson, Z. Retrieved April 5, 2011, from The Atlantic
www.theatlantic.com/business/archive/2011/04/the-metro-story-growth-without-growth/73368/
81

82. 82
LEVERAGED TAILWIND
SOURCES
READING
VIDEO
Is your growth strategy flying blind?
Harvard Business Review, Mehrdad
Baghai, Sven Smit, and Patrick Viguerie,
2009
Jon Vander Ark: Get small to grow big in
micromarkets
www.youtube.com/
watch?v=PYzc9ZdVm2E
The alchemy of growth, 2000, Mehrdad
Baghai, Steve Coley, David White,
Stephen Coley
The granularity of growth, 2007, Patrick
Viguerie, Sven Smit Mehrdad Baghai,
2007
Business Growth - Get Connected, Get
Granular, Get Focused
www.youtube.com/
watch?v=BlC1IHMOENQ
Seth Godin: How to get your ideas to
spread
www.ted.com/talks/seth_godin_on_
sliced_bread.html
Malcolm Gladwell: Choice, happiness
and spaghetti sauce
www.ted.com/talks/malcolm_gladwell_
on_spaghetti_sauce.html
Megatrends. Tailwinds for growth in a
low-growth environment, 2010, BCG

83. 83
BIG VISION
Having a clear vision for the “next big thing”, that builds on the current strengths,
translates into serious investment commitment, includes optionality, combines
societal and economic value, aligns short term actions and leverages either
technology, business model disruption and customer delight

84. 84
BIG VISION OVERVIEW
THREE
HORIZONS
BIPOLAR FOCUS
MOEBIUS RING
INNOVATION
PLAYS
Any corporate needs a
balance of activities across
the 3 horizons: managing
core business, the next big
innovation and a portfolio
of future growth options
Combine commitment
to the longer term vision
with execution in the
very short term (“next
Monday”) actions. All at
the expense of futile midterm planning
Drive the enterprise
to deliver societal and
shareholder value in a
symbiotic way. Similarly,
deliver premium
value and lower cost
simultaneously
Three major plays of
innovation can be
observerd: technology,
business model
disruption and customer
delight
PAGE 85
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PAGE 99
PAGE 108

85. 85
THREE HORIZONS
ANY CORPORATE NEEDS A BALANCE OF ACTIVITIES
ACROSS THE 3 HORIZONS: MANAGING CORE BUSINESS,
THE NEXT BIG INNOVATION AND A PORTFOLIO OF
FUTURE GROWTH OPTIONS
“Investing in innovation would harm the bottom line”
“I am too busy with running the current business, no
time to think about what’s next”
“We have our current business and a few wild ideas, but
no innovation initiatives that are ready to be launched”

86. 86
THREE HORIZONS
ESSENCE: FROM ONE FLOWER TO AN ECOSYSTEM
“ Our thinking about growth and decay is
dominated by the image of a single life span,
animal or vegetable. Seedling, full flower, and
death. The flower that once has bloomed
forever dies...
... but for an ever-renewing society the
appropriate image is a total garden, a balanced
aquarium, or other ecological system. Some
things are being born, other things are
flourishing, still other things are dying, but the
system lives on.”
John Gardner
Self Renewal: The Individual and the Innovative Society,
W.W. Norton, 1981
Source Picture: Wallace, R. Retrieved August 31, 2013, from Flickr
www.flickr.com/photos/rob_wallace/9637672207/
Source Picture: ynnil. Retrieved April 12, 2009, from Flickr
www.flickr.com/photos/nnil/sets/72157617095488185/with/3465661693/

87. THREE HORIZONS
ESSENCE: BALANCE CURRENT AND FUTURE ACTIVITIES
Source: Inspired by original concept of Scott, A. Retrieved August 21, 2013, from Business Model Innovation Hub
www.businessmodelhub.com/profiles/blogs/the-business-model-canvas-and-2
87

88. 88
THREE HORIZONS
ESSENCE: BALANCE CURRENT AND FUTURE ACTIVITIES
Horizon 1: Defending and securing core business.
Horizon 2: Building emerging business.
Building on existing foundations and ensuring the “right to grow” by focussing efforts on
good business operations that are well equipped to absorb change and opportunity. Truly
understanding the business and the areas for improvement to build the best foundations.
Focusing on those ideas or initiatives that are ready to be executed, have been tested
and will extend existing business into parallel or new areas. Horizon 2 often involves
the development of new business models and defining and manage the impacts on the
incumbent business through implementing initiatives from Horizon 2.
Horizon 3: Market making.
Always dedicating some effort or thought to challenging business around what is truly
market defining. Having the ability to quickly test or recognise those ideas or opportunities
arising from Horizon 3 that will work and generate new markets.
Source: Scott, A. “The Business Model Canvas and Horizon Thinking”. Business Model Innovation Hub. 15 February 2011
www.businessmodelhub.com/profiles/blogs/the-business-model-canvas-and-2

89. THREE HORIZONS
KEY INSIGHTS: HAVE A BALANCED PORTFOLIO
Various dangerous profiles exist:
Horizon 2 only: “the all eggs in one basket” bet without a core business generating cash flow
Horizon 1 only: being focused on continuous firefighting in core business or maximizing
profitabily and market share while opportunities pass
Horizon 3 only: the risky profile of a visionary company that runs out of fuel
The optimal allocation of time and cash investments is probably (round numbers):
H1: 40-60%, H2: 30-40% and H3: 20-10%
89

90. 90
THREE HORIZONS
KEY INSIGHTS: LEADING FOR CONTINOUS GROWTH
Source: Baghai, M., Coley, S., and White, D. The alchemy of growth. London: Orion Business, 1999
www.mckinsey.com/Client_Service/Strategy/Latest_thinking/The_Alchemy_of_Growth.aspx

91. THREE HORIZONS
91
TOOL: 3 HORIZONS MANAGEMENT MODEL
ISSUE
H1
MATURE, WELL-ESTABLISHED
BUSINESSES
H2
RAPIDLY GROWING BUSINESS
TIME
HORIZON
CURRENT
FOCUS
EXTEND AND DEFEND CORE BUSINESS
INCREASE PRODUCTIVITY AND PROFIT CONTRIBUTION
LOW UNCERTAINTY/RISK
CURRENT; WILL EVENTUALLY FLATTEN OUT AND
DECLINE
SUBSTANTIAL PROFITS MAY BE 4-5 YEARS IN THE
FUTURE
WITHIN NEXT FEW YEARS, SHOULD COMPLEMENT OR
REPLACE CURRENT CORE BUSINESSES
FIND NEW REVENUE AND PROFIT GROWTH FOR THE
IMMEDIATE FUTURE THROUGH INCREMENTAL SALES,
LINE EXTENSIONS, AND INCREMENTAL EFFICIENCIES
MAKE REVENUE PLANS
BUILD THE BUSINESS
SCALE UP QUICKLY
MANAGE TRIPLE-DIGIT GROWTH
PROFIT
IMPACT
KEY
CHALLANGE
OUTPUTS
TYPE OF
PEOPLE
TALENT
APPROACH
MEASURES
CORPORATE
BEHAVIORS
MEDIUM TERM
BUILD EMERGING BUSINESSES
SCALE PROVEN BUSINESS MODELS, INCREASE
MARKET SHARE, AND GROW TO OPPORTUNITY
MEDIUM UNCERTAINTY/RISK
ANNUAL OPERATING PLAN: TACTICAL PLANS,
RESOURCE DECISIONS, BUDGETS
OPERATORS:
DEEP FUNCTIONAL AND/OR INDUSTRY EXPERTISE
STRONG DRIVE TO CONSISTENLY MEET PLANS
DISCIPLINE
CREATE PERSONAL CONSEQUENCES FOR NON-TERM
PERFORMANCE INCLUIDING CLEAR PENALTIES FOR
UNDER-PERFORMANCE
IMPOSE “NO EXCUSES” MANAGEMENT STYLE
H3
EMERGING BUSINESSES
BUSINESS-BUILDING STRATEGIES: INVESTMENT
BUDGET, DETAILED BUSINESS PLANS FOR NEW
VENTURES; VIABLE PRODUCTS
BUSINESS BUILDERS:
ENTREPRENEURIAL DESIRE TO CREATE
COMFORT WITH AMBIGUITY AND CHANGE
TOP-LINE FOCUSED, SHARP DECISION MAKER
LONG TERM
CREATE VIABLE OPTIONS
TEST BUSINESS MODELS, PROVE VIABILITY,
CAPABILITIES AND VALUE
DELIBERATE INITIATIVES TO SEED GROWTH
OPPORTUNITIES
HIGH UNCERTAINTY/RISK
MOST WILL NOT SUCCEED
A FEW CAN SECURE LONGER-TERM FUTURE
EXPLORE OPTIONS ON FUTURE OPPORTUNITIES,
SUCH AS RESEARCH PROJECTS, PROTOTYPES,
TEST MARKETS, ALLIANCES, AND INVESTMENTS TO
IDENTIFY AND BEGIN TO DEVELOP OPPORTUNITIES
TARGETS CANNOT BE SET WITH PRECISION
DECISIONS TO EXPLORE: INITIAL PROJECT PLAN,
PROJECT MILESTONES
VISIONARIES:
CHAMPIONS
UNCONVENTIONAL THINKERS
PROVIDE AUTONOMY/FREEDOM TO ACT AND MANDATE
TO CREATE AND BUILD
OPPORTUNITY TO CREATE PERSONAL WEALTH
THROUGH CASH BONUSES AND EQUITY PARTICIPATION
OPPORTUNITY TO BUILD AND LEAVE A LEGACY
PROVIDE PSYCHOLOGICAL REWARDS: RECOGNITION OF
IDEAS, FREEDOM TO EXPERIMENT AND EXPLORE
PROVIDE CAREER ADVANTAGE: OPPORTUNITY TO
SATISFY INTELLECTUAL CURIOSITY, OPTION TO
BECOME HORIZON 2 BUSINESS BUILDERS
TRADITIONAL BUDGETS AND CONTROLS
PROFIT
RETURN ON INVESTED CAPITAL
PRODUCTIVITY OF EFFICIENCY
HIGH REVENUE GROWTH
MARKET SHARE GAINS
NEW CUSTOMER ACQUISITIONS
CAPITAL INVESTMENT EFFICIENCY
EXPECTED NET PRESENT VALUE
REVIEW, CHECK
SET AGGRESSIVE TARGETS TO IMPROVE
SUPPORT TAKING RISKS
ADDRESS PROBLEMS TO SCALING
UNDERSTAND VIABILITY
PROJECT-BASED MILESTONES
OPTION VALUATION
RATE OF CONVERSION FROM IDEA TO BUSINESS
LAUNCH
NUMBER OF INITIATIVES
ENGAGE AND WORK WITH AND FOR
FIND VIABLE BUSINESS MODEL
Source: Garvin, David A., and Levesque, L. “Emerging Business Opportunities at IBM.” Harvard Business School Case 304-075, March 2004
www.hbs.edu/faculty/Pages/item.aspx?num=30958

92. 92
THREE HORIZONS
SOURCES
READING
VIDEO
Scott, A. “The Business Model Canvas
and Horizon Thinking”. Business Model
Innovation Hub. 15 February 2011
www.businessmodelhub.com/profiles/
blogs/the-business-model-canvas-and-2
AMCF Horizon Series: Strategy Thought
Leaders Define Strategy
www.youtube.com/
watch?v=0JyRXpYFIcg
Professor Richard Rumelt : What is Good
Corporate Strategy?
www.youtube.com/
watch?v=43kZDnyDXOc
Evan Williams on listening to Twitter
users
www.ted.com/talks/evan_williams_on_
listening_to_twitter_users.html17
Enduring Ideas: The three horizons of
growth. McKinsey Quarterly, 2009
Profit From The Core , 2001, Harvard
Business School Press
Profit From The Core , 2001, Harvard
Business School Press
Staircase to growth. McKinsey Quarterly,
1996
Stop Chasing Too Many Priorities.
Harvard Business review, 2011
Emerging Business opportunities at IBM,
2010, Harvard Business School

93. 93
BIPOLAR FOCUS
COMBINE COMMITMENT TO THE LONGER TERM VISION
WITH EXECUTION OF VERY SHORT TERM (“NEXT
MONDAY”) ACTIONS. ALL AT THE EXPENSE OF FUTILE
MID-TERM PLANNING
“Everything seems to be a priority, we are fire fighting”
“We spend endless time on strategic planning, but it is
more like a paper exercise”
“We don’t have a clear and inspiring goal to aim for”

94. 94
BIPOLAR FOCUS
ESSENCE
Combine long term commitment with short term action
Source Picture: Fisk, P. GeniusWorks
www.emeraldinsight.com

95. BIPOLAR FOCUS
FRAMEWORK: TIME HORIZON AND MANAGEMENT ATTENTION
95

96. 96
BIPOLAR FOCUS
KEY INSIGHTS
Articulate the vision:
Ascertain oneself of organizational buy-in
Articulate an inspirational vision in a simple statement
Make the vision specific so that each employee knows what to focus on and what not to
focus on a day-to-day basis
Focus on action:
Ensure shared understanding, clear roles, decision-making rules, complementary skills
Shorten the feedback cycles drastically; don’t let people work for a long time without
getting input
Have an “undue” expectation of immediate follow-up and resolution (act immediately)

97. BIPOLAR FOCUS
97
TOOL: BIPOLAR FOCUS ASSESSMENT
IN OUR ORGANIZATION...
WE CAN DESCRIBE OUR LONGER TERM VISION IN 50 WORDS
ALL EMPLOYEES UNDERSTAND AND ARE COMMITTED TO THE LOGIC
OF THE LONGER TERM VISION AND WHAT GETS PRIORITIZED
WE FOCUS OUR DISCUSSIONS ON KEY STRATEGIC ISSUES, RATHER
THAN GETTING LOST IN IRRELEVANT NON-STRATEGIC MATTERS
OUT INTERNAL PROJECTS ARE INCONSISTENT WITH OUR LONGER
TERM VISION
OUR TIME SPENT ON PLANNING IS USEFUL AND EFFECTIVE
WE TRANSLATE OUR LONGER TERM VISION TO ANNUAL PLANS AND
BUDGETS IN A DISCIPLINED AND TRANSPARENT PROCESS
OUR PLANNING PROCESS IS DISCIPLINED WITH FOCUSED
INFORMATION REQUESTS AND ANALYSES REQUIRED FOR DECISION
MAKING
WE HAVE IDENTIFIED A FEW EARLY WARNING SIGNS FOR POSSIBLE
RISKS/THREATS THAT ARE ASSESSED PERIODICALLY (RATHER THAN A
VERY DATA INTENSIVE PROCESS)
WE HAVE A CLEAR LIST OF 3-6 CRITICAL STRATEGIC INITIATIVES WE
FOCUS ON
WE UNDERSTAND THE CRITICAL PATHS AND THE ACTIVITIES ON
THESE PATHS ARE STREAMLINED TO ACHIEVE OUR GOALS MOST
EFFECTIVELY
OUR PLANS ARE TRANSLATED INTO ACTIONS AND USED TO MEASURE
PROGRESS
WE HAVE CLEAR ACCOUNTABILITIES AND OUR INDIVIDUAL TARGETS
ARE ALIGNED WITH THE ANNUAL PLANS
LONGER
TERM VISION
EFFECTIVE
PLANNING
SHORT TERM
IMPACT
STRONGLY
DISAGREE
DISAGREE
NEUTRAL
AGREE
STRONGLY
AGREE

98. 98
BIPOLAR FOCUS
SOURCES
READING
VIDEO
Dave McClure’s 10 tips for the perfect
investment pitch
www.thenextweb.com/
entrepreneur/2011/10/29/davemcclures-10-tips-for-the-perfectinvestment-pitch/
The elevator pitch
www.youtube.com/
watch?v=Tq0tan49rmc
Effective Strategic Planning with the “Art
of Action”
www.youtube.com/
watch?v=yoFVPpo1eEE
Eleven start-up pitches archetypes with
examples from YC companies
www.jasonshen.com/2012/elevencompelling-startup-pitch-archetypeswith-examples-from-yc-companies/
Getting behind the perfect pitch, M. Kok
www.mjskok.com/resource/gettingbehind-perfect-pitch
Looking beyond the `Vision Thing’, 1997,
by Harari, Oren, Management Review,
1997
The power of bifocal vision by Albrecht,
Karl G,1994, Management Review

99. 99
MOEBIUS RING
DRIVE ENTERPRISE TO DELIVER SOCIETAL AND
SHAREHOLDER VALUE IN A SYMBIOTIC WAY. SIMILARLY,
DELIVER PREMIUM VALUE AND LOWER COST
SIMULTANEOUSLY
“I don’t think business and doing good for society can
go hand in hand”
“We are a non-profit, so we better not have any
overhead”
“Contributing to society always makes the business
more complicated and expensive”

100. 100
MOEBIUS RING
ESSENCE: INTEGRATE PEOPLE, PLANET, PROFIT
People/planet versus profit are not two sides of a ring–
they are the same side of the coin
Source Picture: Benbennick, D. Retrieved March 14, 2005, from Wikimedia Commons
www.commons.wikimedia.org/wiki/File:M%C3%B6bius_strip.jpg

101. MOEBIUS RING
KEY INSIGHTS: EXAMPLE OF TRIPLE P INTEGRATION
We help people around the world meet everyday
needs for nutrition, hygiene and wellbeing, with
brands that help people look good, feel good
and get more out of life. We work to create a
better future every day for our consumers and
the communities in which we operate. We aim
to double the size of Unilever while reducing our
impact on the environment
Our oral care brands encourage children to brush their teeth day and night for optimal dental
health. We helped parents believe that children learn through play, and mud spatters and
grass stains can easily be removed with effective laundry product. We bring our expertise in
nutrition to children in some of the world’s poorest countries. Our margarine brands have
been scientifically proven to help reduce cholesterol levels. We provide research into skin
conditions and support for people affected by them. We promote hand washing with soap
has reached more than 70 million people in rural India. (Through Dove) we educate and
inspire millions of young women. We provide affordable oral care solutions for consumers in
developing markets. We encourage consumers to change their laundry habits to reduce water
and energy consumption. We back sustainable forest management projects in Africa. Many
of our brands contain ethically and sustainably sourced ingredients that are independently
certified. Around half our raw materials come from agriculture and forestry, so we’re working
towards making our key crops 100% sustainable
Source Picture: Unilever. Retrieved December, 2013, from Unilever.com
www.unilever.com
101

102. 102
MOEBIUS RING
FRAMEWORK: SOCIAL IMPACT AND SHAREHOLDER VALUE
Break-through innovation creates shareholder and societal value

103. MOEBIUS RING
KEY INSIGHTS
Break-through innovation can lead to increasing both societal and shareholder value in an
integrated manner
Opportunity for “profit” sector:
To broaden scope from reducing cost to reducing societal burden
To broaden scope from revenue growth to convincingly improve society
To stimulate innovation through usage of stretched targets e.g., zero footprint and
continued employment growth
Opportunity for “non-profit” sector:
Combine social mission with economically sound business model
Apply good business practices to maximize impact
103

104. 104
MOEBIUS RING
KEY INSIGHTS: EXAMPLES OF TRIPLE P BREAKTHROUGHS
LAMP
CAR
BOTTLE
CONTRIBUTE
TO SOCIETY
LED LAMP ENABLES
STUDENTS TO STUDY
BETTER IN CLASSROOM
CAR WITH AUTOMATED
SYSTEM TO AVOID
ACCIDENTS
BOTTLE PROMOTES BREAST
CANCER AWARENESS
REDUCE COST
TO SOCIETY
LED LAMP SAVES
ELECTRICITY
CAR CONSUMES LESS
FUEL
BOTTLE OF
BIODEGRADABLE
MATERIALS REDUCES CO2
AND WASTE FOOTPRINT

105. MOEBIUS RING
TOOL: FROM SOCIAL RESPONSIBILITY TO SHARED VALUES
Source: Porter, M. and Kramer, M. Retrieved December 22, 2010, from Harvard Business Review
www.hbr.org/2011/01/the-big-idea-creating-shared-value
105

106. 106
MOEBIUS RING
TOOL: “NON-PROFIT” PROFESSIONAL MANAGEMENT
FROM TRADITIONAL NON-PROFIT PRACTICES...
FOCUS OFTEN ON ACTIVITIES RATHER THAN
...TO COMMON BUSINESS PRACTICES
CLEAR, QUANTITATIVE METRICS ON IMPACT
IMPACT
PERFORMANCE
MEASURES
MEASURE ONLY AT THE END OF A PROJECT
SYSTEMATIC AND FREQUENT MEASUREMENTS
OFTEN BLURRED LINES BETWEEN BOARD AND
CLEARLY DEFINED RESPONSIBILITIES ACROSS
STAFF
GOVERNANCE
BOARD MUST SUBSTITUTE FOR DISCIPLINARY
THE WHOLE ORGANIZATION
STRONG SUPERVISORY BOARD
ROLE OF CAPITAL MARKETS
FUNDING PARTNERS FOCUS ON DIRECT
PROJECTS EXPENSES RATHER THAN SUPPORT
STRUCTURE
FUNDING
FRAGMENTED FUNDING SOURCES AND
RELIANCE ON DONATIONS
OFTEN FACE HR CONSTRAINTS AND LESS
MANAGEMENT CAPABILITY
HUMAN
RESOURCES
STAFF TYPICALLY MOTIVATED BY CAUSE
OBTAIN FUNDING ALSO FOR “OVERHEAD” AND
MARKETING
DON’T RELY ONLY ON GRANTS OR GIFTS FOR
FUNDING , ALSO CONSIDER OTHER BUSINESS
MODELS
HIRE AND INVEST IN GOOD MANAGEMENT BY
PROVIDING MARKET CONFORM SALARIES
PROVIDE REWARDS/INCENTIVES BASED ON
PERFORMANCE
LACK OF MARKETING BUDGET
EFFECTIVE MARKETING EFFORTS FOCUSED ON
TARGET SEGMENTS
MARKETING
UNFOCUSED, WIDELY SPREAD MARKETING
DECENT MARKETING BUDGET
LIMITED OR UNPROFESSIONAL SUPPORT
EFFECTIVE MANAGEMENT PROCESSES
EFFORTS
SUPPORT
PROCESSES
PROCESSES DUE TO LACK OF INVESTMENTS
AND SKILLED RESOURCES
AVERSE ATTITUDE TOWARDS CLEAR
ACCOUNTABILITY AND FORMAL PROCESSES
(INVESTMENT DECISIONS, HR MANAGEMENT,
BUDGETING, ETC)
LEAN OPERATIONAL PROCESSES

107. MOEBIUS RING
107
SOURCES
READING
VIDEO
Building Social Business Models: Lessons
from the Grameen Experience
www.sciencedirect.com/science/article/
pii/S0024630109001290
Michael Porter, Creating shared value
www.youtube.com/watch?v=z2oS3zk8V
A4feature=youtube_gdata_player
What non-profits can learn from
CocaCola
www.ted.com/talks/melinda_french_
gates_what_nonprofits_can_learn_
from_coca_cola.html
The way we think about charity is dead
wrong
www.ted.com/talks/dan_pallotta_the_
way_we_think_about_charity_is_
dead_wrong.html
Creating shared value, Harvard Business
Review, 2011
Peepoo bag: customer value proposition
and business model for social
entrepreneurs
www.businessmodelalchemist.
com/2010/08/combiningbusiness-model-prototypingcustomer-development-and-socialentrepreneurship.html
Shaping the future: Solving Social
Problems through Business Strategy,
McKinsey Company

108. 108
INNOVATION PLAYS
THREE MAJOR PLAYS OF INNOVATION CAN BE
OBSERVERD: TECHNOLOGY, BUSINESS MODEL
DISRUPTION AND CUSTOMER DELIGHT
“We have been succesfull with this business model for a
while, no need to change the value chain dynamics”
“We always base our offerings on clearly identified
customer preferences, supported by quantitative data”
“Technology doesn’t play a clear role in our industry”

109. INNOVATION PLAYS
109
OVERVIEW
TECHNOLOGY
BUSINESS MODEL
DISRUPTION
CUSTOMER DELIGHT
Using a new, improved or new
combination of technologies in the
offering itself, in the development,
manufacturing or delivery process
Change the value chain players,
economics, creating new profit or
changing the delivery models for an
offering
Break-through innovation is not
based on customer preferences or
articulated needs; indeed innovation
will surprise customers and create
new needs
PAGE 110
PAGE 117
PAGE 126

110. 110
INNOVATION PLAYS:
TECHNOLOGY
USING A NEW, IMPROVED OR NEW COMBINATION OF
TECHNOLOGIES IN THE OFFERING ITSELF, IN THE
DEVELOPMENT, MANUFACTURING OR DELIVERY
PROCESS
“We do all our RD in-house, more effective than to
involve externals”
“When the market starts to disqualify the initial hype,
what do you do?”
“It will take a long time before technologies will be able
do that”

111. INNOVATION PLAYS: TECHNOLOGY
ESSENCE: BUY IS OFTEN MORE EFFECTIVE THAN BUILD
BENEFIT OF BUY VS. BUILD
LEVERAGING EXTERNAL ASSETS/TALENT AT LOW/NO COST
REDUCTION OF
RD COST
SHARING OF UP-FRONT INVESTMENTS AND RUNNING EXPENSES
ACCESS TO MORE SPECIALIZED TALENT
LOWER
PROJECT
FAILURE RATE
EARLY UNDERSTANDING OF STAKEHOLDER NEEDS (CUSTOMERS, SUPPLIERS, ETC.)
DEVELOP MULTIPLE TECHNOLOGIES IN PARALLEL
ACCESS TO BROADER IDEA AND TALENT BASE
BETTER
QUALITY OF
INNOVATION
ACCESS TO DEEPER KNOWLEDGE OF CUSTOMERS’ AND SUPPLIERS’ NEEDS
MORE EYES ON PROBLEMS
FASTER TIME
TO MARKET
INVOLVEMENT OF MORE SPECIALIZED TALENT AND ASSETS SPEEDS UP IDEATION PHASE
111

112. 112
INNOVATION PLAYS: TECHNOLOGY
KEY INSIGHTS: TECHNOLOGY PERFORMANCE OVER TIME
Leveraging the external market to source intellectual property and develop new technologies is
often more effective than developing these in-house
NEXT TECHNOLOGY LOOKS INITIALLY INFERIOR

113. INNOVATION PLAYS: TECHNOLOGY
KEY INSIGHTS: STEP IN AFTER THE PHASE OF DISILLUSIONMENT
The optimal time to commit to a new technology might be when the market starts to disqualify
the initial hype
Source: Gartner’s 2012 Hype Cycle for Emerging Technologies. Retrieved July, 2012, from Gartner.com
www.gartner.com/technology/research/hype-cycles/
113

114. 114
INNOVATION PLAYS: TECHNOLOGY
KEY INSIGHTS: DO-IT-YOURSELF
Digitalization is the “über” technology trend driving down costs exponentially, providing
superior control and access and opening up the “Internet of things”. Moore’s law dynamics
continue to surprise progress
COST OF COMPUTING POWER EQUAL TO AN IPAD2
Source: Cost of Computing Power Equal to an iPad2. Retrieved August 5, 2011, from hamiltonproject.org
www.hamiltonproject.org/multimedia/charts/cost_of_computing_power_equal_to_an_ipad2/

115. INNOVATION PLAYS: TECHNOLOGY
TOOL: ZAPPA’S TECHNOLOGY CARDS
Source: Zappa’s Technology Cards. Retrieved July, 2012, from THNKLink
www.thnklink.org/mod/ouwiki/view.php?id=84page=Emerging+Technologies
(Note: for THNK participants only)
115

116. 116
INNOVATION PLAYS: TECHNOLOGY
SOURCES
READING
VIDEO
Disruptive technologies: advances that
will transform life, business and global
economy. McKinsey Global Institute
www.mckinsey.com/insights/mgi.aspx
Everything is a remix
www.everythingisaremix.info/watch-theseries
Digital transformation, we haven’t seen
anything yet
www.youtube.com/
watch?v=AZ5ePL36BbU
Johanna Blakley: Lessons from fashion’s
free culture
www.ted.com/talks/johanna_blakley_
lessons_from_fashion_s_free_culture.
html
Ray Kurzweil: The accelerating power of
technology
www.ted.com/talks/ray_kurzweil_on_
how_technology_will_transform_
us.html
Digitizing the value chain for high
performance, Accenture, 2012
www.accenture.com/
SiteCollectionDocuments/PDF/
Accenture-Digitizing-the-Value-Chainfor-High-Performance.pdf
2013 internet trends. Kleiner Perkins
Caufield Buyers
www.kpcb.com/insights/2013-internettrends
Pretty profitable parrots
www.economist.com/node/21554500
First mover or fast follower, Bloomberg
www.bloomberg.com/news/2012-0614/first-mover-or-fast-follower-.html

117. 117
INNOVATION PLAYS: BUSINESS
MODEL DISRUPTION
CHANGE THE VALUE CHAIN PLAYERS, ECONOMICS,
CREATING NEW PROFIT OR CHANGING THE DELIVERY
MODELS FOR AN OFFERING
“Our value chain is still intact – we control and operate
in all steps”
“Technology enables our customers more are more –
they almost take over the power”
“Software is taking over our service industry”

118. 118
INNOVATION PLAYS: BUSINESS MODELS
ESSENCE: BUSINESS MODEL INNOVATION

119. INNOVATION PLAYS: BUSINESS MODELS
KEY INSIGHTS
Split of value chains and modularity. Value chains from raw materials to final products or from
research to after-sales service are split into separate steps. Niche players who excel in just one
step in the chain emerge
Do-it-Yourself business models. Empowered by the Internet, consumer and business
customers can design and create their own services. This is superior in terms of engagement,
customization and cost of delivery
Shift from services to software. Related to DIY is the shift to software. It significantly reduces
costs, and increases functionality for users
“Big hit” and long tail (platform) opportunities. The number of global hit products and
services is increasing. So it the fragmentation of the long tail of niche products and services
Bipolarization. Both the “premium” high end and the “valued” low end grow at expense of the
middle. This holds for almost all industries
Mass Individualization. Customer Relationship management (customer databases combined
with software based recommendation engines allows for individual offers at mass scale)
Authenticity/craftsmanship/relationship. The antidote of software based services and global
“big hit” brand is the appeal of any product local, with a story and a face of the craftsman who
produced the good
119

120. 120
INNOVATION PLAYS: BUSINESS MODELS
KEY INSIGHTS: SPLIT OF VALUE CHAINS
iPod example:

121. INNOVATION PLAYS: BUSINESS MODELS
KEY INSIGHTS: DO-IT-YOURSELF
MakerBot
Manufacturing
3-D Prototyping/Printing
oDesk/eLance
Workforce as a Service (WaaS)
Employment
On-Demand/Global
Airbnb
Housing
Turn Privately-Owned Properties into Hotel
Experience
Source Pictures:
www. store.makerbot.com/replicator2.html , www.odesk.com , www.airbnb.com
121

122. 122
INNOVATION PLAYS: BUSINESS MODELS
KEY INSIGHTS: SERVICES TO SOFTWARE
VIP Fridge magnet
Pizza ordering by home delivery in Dubai
Bluetooth enabled fridge-magnet button to
order pizza’s
Västtrafik Tram sightseeing
Free app that guides visitors to the nearest trams
stop
Public transport
Phone GPS triggers the right audio tour guide
Push to talk in Shanghai
Taxi service
Voicemail of customer is instantly delivered to
all nearby available taxis
Taxi driver chooses to answer
Source Pictures:
www. redtomato.biz/magnet , www.vasttrafik.se/timetables/sightseeing/index_eng.html ,
www.commons.wikimedia.org/wiki/File:Shanghai_62580000_Taxi.jpg

123. INNOVATION PLAYS: BUSINESS MODELS
KEY INSIGHTS: WHAT TO DO TO THRIVE WITH PLATFORMS
Will you be the disrupter or the disrupted?
To act on platform opportunities, consider the three factors transforming industry and
embrace them:
Remake the role that experts play inside your business to leverage user capabilities outside
your business. Build social curation and reputation systems to employ the collective
intelligence and judgment of your users
Connect consumers to their best product options, regardless of source, through data-driven
matchmaking. The firm that builds an OpenTable for consumer finance, considering
appetites for risk and reputations of products that deliver on promises, would help buyers
make sense of the dizzying array of complex and disconnected products. The value would
be enormous
Finally, solve a consumer problem in your industry by marshaling spare resources. If you’re
in transportation, build systems that employ other people’s trucks before expanding your
own fleet
Source: Choudary, S.P. Retrieved October 19, 2013, from platformed.info
www.platformed.info/platform-economics
123

124. 124
INNOVATION PLAYS: BUSINESS MODELS
TOOL: THNK VENTURE DESIGN
Source: THNK Venture model
www.thnk.org

125. INNOVATION PLAYS: BUSINESS MODELS
SOURCES
READING
VIDEO
Big Bang disruption, Harvard Business
Review, March 2013
Digitalizing the value chain for high
performance. Accenture
www.accenture.com/
SiteCollectionDocuments/PDF/
Accenture-Digitizing-the-Value-Chainfor-High-Performance.pdf
Authors@Google: Eric Ries “The Lean
Startup“
www.youtube.com/
watch?v=f EvKo90qBns
Platform thinking
www.platformed.info/platformeconomics
Reinventing your business model,
Harvard Business Review, 2008
Unbundling of the value chain, The
internet’s impact on supply chain
relationships
www.boozallen.com/media/file/80560.
pdf
125

126. 126
INNOVATION PLAYS: CONSUMER
DELIGHT
BREAK-THROUGH INNOVATION ISN’T BASED ON
CUSTOMER PREFERENCES OR ARTICULATED NEEDS;
BUT WILL SURPRISE CUSTOMERS AND CREATE NEW
NEEDS
“Our NPS is way below the industry average”
“We have many new ideas and technologies, just didn’t
discover yet how they can be useful for the customer”
“We focus innovation either on making a premium or
providing and offering at extremely low cost”

127. INNOVATION PLAYS: CUSTOMER DELIGHT
KEY INSIGHTS
The customer needs to be delighted and therefore conclude he wants it
Almost all industries have the potenial for a high NPS
Source: Consumer Benchmark Survey. Retrieved Q3, 2013, from Temkin Group
www.experiencematters.wordpress.com/category/temkin-group-research/
127

128. 128
INNOVATION PLAYS: CUSTOMER DELIGHT
KEY INSIGHTS
The customer needs to be delighted and therefore conclude he wants it
NPS has to reach treshold for market to take off
Source: IT Benchmark Survey. Retrieved Q1, 2012, from temkingroup.com
www.experiencematters.wordpress.com/2012/05/14/net-promoter-score-and-market-share-for-60-tech-vendors/

129. INNOVATION PLAYS: CUSTOMER DELIGHT
FRAMEWORK: BI-POLARIZATION SPECTRUM
Break-through innovation combines better functionality and lower cost, combining the two
ends of the spectrum (E.g. Wikipedia versus an encyclopedia)
129

130. 130
INNOVATION PLAYS: CUSTOMER DELIGHT
TOOL: PIVOT POINTS
The final purpose of a new concept of technology can derivate significantly from the original
intent
With “pivot”, you keep one fundamental aspect of your concept fixed, with changing the other,
based on what is most wanted in the moment
CUSTOMER SEGMENT
(SAME SEGMENT,
DIFFERENT SERVICE/
PRODUCT)
CUSTOMER NEED
(SAME PROBLEM
RESOLVED, DIFFERENT
PRODUCT/SERVICE)
CHANNEL
(SAME SERVICE/PRODUCT,
NEW CHANNEL)
VALUE CAPTURE
(SAME SERVICE/PRODUCT,
NEW REVENUE MODEL)
ZOOM IN
(FEATURE BECOMES
PRODUCT)
ZOOM OUT
(PRODUCT BECOMES
FEATURE)
PURPOSE
(SAME OVERARCHING
PURPOSE, DIFFERENT
BUSINESS MODEL)
TECHNOLOGY
(SAME TECHNOLOGY,
DIFFERENT USAGE)

131. INNOVATION PLAYS: CUSTOMER DELIGHT
TOOL: USER INSIGHT AND FORESIGHT TOOLS
Source: THNK Concepting Flow
www.thnk.org
131

132. 132
INNOVATION PLAYS
SOURCES
READING
VIDEO
The customer’s voice. Why are we so bad
at hearing it? BCG
www.bcg.com/documents/file35167.pdf
Innovation in Consumer products,
Accenture, 2008
www.accenture.com/
SiteCollectionDocuments/PDF/
ConsumerProductsGroupPoV_103008_
fnl.pdf
Why I brought PacMan to Moma
www.ted.com/talks/paola_antonelli_
why_i_brought_pacman_to_moma.
html
Malcolm Gladwell: Choice, happiness
and spaghetti sauce
www.ted.com/talks/malcolm_gladwell_
on_spaghetti_sauce.html
The Power of Habit Why We Do What
We Do in Life and Business
www.youtube.com/
watch?v=a6p3lG9EDXw
Understanding change and predicting
trends
www.baekdal.com/insights/
understanding-change-and-predictingtrends/
5 ways companies can pivot like lean
www.fastcodesign.com/1672580/5ways-big-companies-can-pivot-like-leanstartup
Why we’re so bad at predicting the future
www.venturevillage.eu/predicting-future

133. 133
TOP TALENT
Ensuring the organization nurtures, attracts and protects innovation “rock stars”
– the individual innovation leaders that will take the risks, and “break the eggs”
to eventually make innovation happen - and allow them to orchestrate strong
creative teams around them

134. 134
TOP TALENT OVERVIEW
ORCHESTRATING
TEAMS
TALENT MAKE
AND BUY
CULT OF
INNOVATOR
ROCK STAR
GOVERNANCE
HEADROOM
There are three essential
elements to an effective
team: casting, setting-up
the team, followed by
leading the organization
Break-through innovation
requires infusion of
external talent to engage
“fresh eyes”, ask naive
questions and collect
novel analogies
The output difference
between an outstanding
creative talent and a good
creative talent is huge ,
much more significant
than in operating or
management jobs
Form a supervisory
board that can stretch
the executive board
and stretches with the
board in the continued
accelerated growth in
terms of vision and
innovation
PAGE 135
PAGE 144
PAGE 150
PAGE 156

135. 135
ORCHESTRATING TEAMS
THERE ARE THREE ESSENTIAL ELEMENTS TO AN
EFFECTIVE TEAM: CASTING, SETTING-UP THE TEAM,
FOLLOWED BY LEADING THE ORGANIZATION
“We have great idea generation sessions with our
management team, but nobody seems to care about the
execution”
“I can’t rely on my team members, they never keep their
promises”
“Our roles are not very clear, each member of the board
seems to focus on their own hobby horses”

136. 136
ORCHESTRATING TEAMS
ESSENCE
HOP
STEP
JUMP
CASTING
ORCHESTRATING
LEADING
PICKING THE TEAM
SETTING UP THE TEAM
GUIDING THE ORGANIZATION
Source Picture: Giles, R. Retrieved August 21, 2008, from Wikipedia The Free Encyclopedia
www.en.wikipedia.org/wiki/File:Triple_Jump,Idowu_Phillips,_Bejing_08.jpg

137. ORCHESTRATING TEAMS
KEY INSIGHTS
Hire bigger than you are
“If each of us hires people who are smaller than we are, we shall become a company
of dwarfs. But if each of us hires people who are bigger than we are, we shall become a
company of giants.” - David Ogilvy
“Hop, step, jump”
Hop: Cast the management team with the right mix of capabilities and personality types
Step: Align the team on a common goal and primitives
Jump: Lead the team from the front and the back
The creative people for one’s team can be found across all functions and are best characterized
as paradoxical
As innovation is a perilous journey, one wants people who one can trust
137

138. ORCHESTRATING TEAMS
KEY INSIGHTS
HIRE PEOPLE THAT ARE BIGGER THAN YOU ARE
B
UT I
F
CH O
F EA
WE S
E
AN W
R TH
LLE
A
E SM
O AR
E WH
PL
rfs
PEO
dwa
RES
Y OF
S HI
PAN
FU
O
M
ACH
A CO
IF E
OME
B EC
L
HAL
WE S
ARE
H
US H
BE
ALL
IR
EO
ES P
COM
EA
PLE
W
OF
E AR
E
N TS
GIA
RE
HO A
Y
PAN
COM
NW
THA
BIGG
ER
- David Ogilvy
138

139. ORCHESTRATING TEAMS
KEY INSIGHTS: TYPICAL PROFILE OF CREATIVE PEOPLE
Creative people are paradoxical
Combining convergent and divergent thinking
Smart and fast , yet naïve about what does not work
Playful with discipline, putting in long hours.
Imagination combined with a rooted sense of reality. Rebellious yet deeply rooted in an area
of expertise
Extroverted, yet reserved and reflective
Humble about importance of luck and of predecessors while proud of achievement
Sensitive, even in pain, with lack of perfection, yet truly enjoying the creative pursuit
Great bursts of energy, combined with periods of quiet and at rest
Source: Csikszentmihalyi, M. “Creativity: The Work and Lives of 91 Eminent People.” HarperCollins, 1996
www.hbs.edu/faculty/Pages/item.aspx?num=30958
139

140. 140
ORCHESTRATING TEAMS
FRAMEWORK: WHO TO TRUST
Behaviors that build trust
Credibility: Personality traits for and
track record in creative efforts
Reliability: Consistency
between what is said and
body language
Personal connect:
Empathy and
willingness to
disclose and be
vulnerable about
weaknesses and
concerns
Source: storebukkebruse. Retrieved September 14, 2012, from Flickr
www.flickr.com/photos/tusnelda/8408155485/
Behaviors that undermine trust
Self-orientation: Degree of egocentricity.
Lack of willingness to understand the
other person. Inability to be generous

141. ORCHESTRATING TEAMS
141
TOOL: MBTI PRE-TEST
DISCLAIMER
These are 4 questions, only to give a first indication. To do a proper assessment of your MBTI
profile, use the formal MBTI test1.
MBTI PRE-TEST
QUESTIONS
PROFILE INDICATION
PEOPLE AROUND YOU: E
INNER STRENGTH: I
FUTURE: N
WHEN PUSHED, WHAT IS MORE IMPORTANT, WHAT IS BEING SAID OR WHO SAID IT? WOULD YOU LIE FOR A FRIEND?
NO: T
DO YOU PREFER PLANNING OR SURPRISE? HOW DO YOU APPROACH HOLIDAY?
SURPRISE: P
WHAT IS YOUR SOURCE OF ENERGY, PEOPLE AROUND YOU OR INNER STRENGTH?
DO YOU THINK ABOUT THE PRESENT OR DO YOU THINK ABOUT THE FUTURE? WHAT DO YOU ENJOY MOST,
REALIZATION OF ANTICIPATION?
PRESENT: S
YES: F
PLANNING: J
TEAM IMPLICATIONS
Ensure team members are aware of differences in style and personalities without being
judgmental
Ensure the team is sufficiently balanced or is aware of the weaknesses (e.g., no one likes
planning)
1
. Please refer to the official website of Myers and Briggs for the official MBTI test: www.myersbriggs.org

142. 142
ORCHESTRATING TEAMS
TOOL: TEAM ASSESSMENT
SURVEY FOR THE TEAM - QUESTIONS TO ASK YOURSELF
OUR TEAM HAS ALL FUNCTIONAL SKILLS AND BEHAVIOR STYLES TO WIN
OUR TEAM HAS SUFFICIENT COMMONALITY TO RECOGNIZE AND TRUST
EACH OTHER
OUR TEAM IS SUFFICIENTLY DIVERSE TO AVOID GROUP THINK
TEAM MEMBERS ENJOY WORKING WITH AND INTERACTING WITH EACH
OTHER
WE ALL AGREE ON THE SAME VISION FOR THE COMPANY IN 3-5 YEARS
TIME
TEAM MEMBERS WILLINGLY MAKE SACRIFICES (SUCH AS BUDGET, TURF,
HEAD COUNT) IN THEIR DEPARTMENTS OR AREAS OF EXPERTISE FOR
THE BETTER OF THE TEAM
WE HAVE CLEAR AGREEMENTS ON ROLES, DECISION RIGHTS AND WAY OF
WORKING
WE HAVE AN OPEN DIALOGUE, WE DARE TO CHALLENGE EACH OTHER IN
A PRODUCTIVE CONFLICT, LEAVING NOTHING UNSAID AND PICKING UP THE
BEST IDEAS
WE WORK TOGETHER IN A TRUST-BASED MANNER, SHARING FEARS,
ADMITTING MISTAKES AND CONNECTING ALSO ON A PERSONAL LEVEL
WE GIVE EACH OTHER FEEDBACK
WE ALL RECEIVE CLEAR DIRECTION
EACH OF US HAS A PROPER MANDATE AND THIS IS CASCADED DOWN INTO
THE ORGANIZATION THROUGH DELEGATION OF ROLES AND AUTHORITIES
WE GET THE RIGHT TRAINING, TOOLS AND SUPPORT
WE HAVE THE RIGHT CONTROLS AND SAFETY-NETS IN PLACE TO AVOID
SIGNIFICANT FAILURES
CASTING
ORCHESTRATING
LEADING
STRONGLY
DISAGREE
DISAGREE
NEUTRAL
AGREE
STRONGLY
AGREE

143. ORCHESTRATING TEAMS
143
SOURCES
READING
VIDEO
MBTI profile
www.myersbriggs.org
Alternative MBTI profile
www.similarminds.com
Five Dysfunctions of a Team
www.youtube.com/
watch?v=UtB6D9tIjl8
Learning styles inventory, California
Management Review Article “Innovation
as a Learning Process: Embedding Design
Thinking”
www.vimeo.com/3475327
Dare to disagree
www.ted.com/talks/margaret_
heffernan_dare_to_disagree.html
Personality pathways
www.personalitypathways.com/type_
inventory.html
Team work at the top, 2001, McKinsey
Quarterly
Three steps to building a better top team,
2011, McKinsey Quarterly

144. 144
TALENT MAKE AND BUY
BREAK-THROUGH INNOVATION REQUIRES INFUSION OF
EXTERNAL TALENT TO ENGAGE “FRESH EYES”, ASK
NAIVE QUESTIONS AND COLLECT NOVEL ANALOGIES
“I really need a radical new way of thinking in our
organization”
“It will just take too long to train people in-house to be
able to master this skill”
“We have a blind spot for those competences and we
typically don’t have them in our DNA”

145. TALENT MAKE AND BUY
ESSENCE: RECRUIT INNOVATIVE PEOPLE
To illustrate, Bezos described how
he surrounds himself with people
at Amazon who are inventive.
He asks all job candidates: “Tell
me about something that you
have invented.” He adds, “Their
invention could be on a small
scale—say, a new product feature
or a process that improves the
customer experience, or even a
new way to load the dishwasher.
But I want to know that they will
try new things.”
“I also look for people who
believe they can change the
world,” Bezos stated. “If you
believe the world can change,
then it’s not a stretch to believe
you can be a part of it.”
Source Picture: Forbes Staff. Retrieved April, 2012, from Forbes.com
www.forbes.com/sites/forbespr/2012/04/04/press-release-amazons-jeff-bezos-tops-the-list-of-the-best-ceos-for-the-buck-while-sirius-xm-radiosmel-karmazin-ranks-as-one-of-the-lowest/
145

146. 146
TALENT MAKE AND BUY
KEY INSIGHTS
There is significant resistance against external creative talent hiring
Most organizations find attracting creative talent externally as admitting defeat or dismissing
internal expertise
Genuine interest in what the external world can bring in terms of new ideas is precious
Executive search typically centers on “safe pair of hands”, the opposite of what is needed for
break-through innovation
When external talent is hired, the corporate expectation is to first have them to learn the
organization and the business before making any suggestions for change

147. TALENT MAKE AND BUY
TOOL: INTERVIEW QUESTIONS
Tell us about a time when the tried-and-true solution did not work and if you were able to solve
the problem and how?
Tell us about a situation in which you had to come up with several new ideas in a short period
of time. Were they accepted and were they successful?
Describe the most significant plan or program that you ever developed or implemented
Tell us about a time when you created a new process or program that was considered risky
Tell us about a problem that you solved in a unique or unusual way. Were you happy with the
outcome?
147

148. 148
TALENT MAKE AND BUY
TOOL: RECRUITING HEATMAP

149. TALENT MAKE AND BUY
149
SOURCES
READING
VIDEO
Encouraging organizations to change,
2011, The influence model, Colin Price
N/A
Meeting the challenge of corporate
entrepreneurship, 2012, Harvard Business
review
What every CEO should know about
creating new businesses, Harvard
Business Review, D.A. Garvin, 2012
The innovators DNA, Clayton M.
Christensen, Hal B Gregersen Jeff Dyer,
2011

150. 150
CULT OF INNOVATOR ROCK STAR
THE OUTPUT DIFFERENCE BETWEEN AN OUTSTANDING
CREATIVE TALENT AND A GOOD CREATIVE TALENT IS
HUGE , MUCH MORE SIGNIFICANT THAN IN OPERATING
OR MANAGEMENT JOBS
“We recruit creative people, but we can’t fit them into our
system so they leave quickly”
“We don’t have any creative or innovative leaders in our
board”
“We aren’t able to recruit creative people at the top – just
doesn’t fit in our same salary scheme”

151. CULT OF INNOVATOR ROCK STAR
ESSENCE: BRING IN THE INSPIRATIONAL TOP TALENT
KEEP
CALM
THE CAVALRY
HAS ARRIVED
151

152. 152
CULT OF INNOVATOR ROCK STAR
KEY INSIGHTS
Appoint the “top of the top”, and avoid past glory. Recruit creative top talent with failures on
their resume
Failure is a source of creative dissent and pursuit. Success often equals repeat and complacency.
Protect your hired top talent again the organizational push-back
Be willing to pay a special price for special talents (in terms of salary, recognition and freedom
to act)

153. CULT OF INNOVATOR ROCK STAR
KEY INSIGHTS: BREAK THROUGH TRADITIONAL QUALIFICATIONS
Be flexible in applying the traditional qualifications for senior roles
It’s imperative to staff the “next big thing” with the strongest business development and
business building talent (so not with junior staff).
Typically senior talent is staffed on largest units not on the ones with the most future potential,
and full-time involved on the most pressing operational issues, not full time leading future
oriented projects.
IBM is one of few companies with a pool of senior development leaders available for project
leadership.
Source: Clean Sheet Capital Redesign
153

154. 154
CULT OF INNOVATOR ROCK STAR
TOOL: GUESS WHO
What new skills does your organization need (next to what it’s already good at)?
Who externally (individual or firm) is truly leading edge in this skill area?
How are you going to win this individual or firm over?
Source Picture: Khan, Bethany Ann. Retrieved January 24, 2010, from Flickr
www.flickr.com/photos/bethanykhan/4466733616/

155. CULT OF INNOVATOR ROCK STAR
155
SOURCES
READING
VIDEO
Meeting the challenge of corporate
entrepreneurship, Harvard Business
review, 2012
The innovators DNA, Hal Gregerson.
www.youtube.com/watch?v=Xy6Ex1C_
SAs
What every CEO should know about
creating new businesses, Harvard
Business Review, D.A. Garvin, 2012
The innovators DNA, Clayton M.
Christensen, Hal B Gregersen Jeff Dyer,
2011
Claudia Kotchka on innovation at PG,
Institute of Design Strategy Conference,
May 2008
www.vimeo.com/5203345

156. 156
GOVERNANCE HEADROOM
FORM A SUPERVISORY BOARD THAT CAN STRETCH THE
EXECUTIVE BOARD AND STRETCHES WITH THE BOARD
IN THE CONTINUED ACCELERATED GROWTH IN TERMS
OF VISION AND INNOVATION
“I am selecting my new board member, but don’t know
what is a good mix”
“How can I get my supervisory board to get more
innovative minded?”
“What is the right balance of controlling what happens
versus pushing our innovative vision for our board?”

157. GOVERNANCE HEADROOM
ESSENCE
A supervisory board that can stretch the executive board and stretches with the executive
board in the continued accelerated growth in terms of visioning and innovation
Source Picture: Baltic Development Forum. Retrieved January 19, 2011, from Flickr
www.flickr.com/photos/baltic-development-forum/5369318551/
157

158. 158
GOVERNANCE HEADROOM
KEY INSIGHTS
Compose the board for heavy engagement on growth, innovation, and change
Avoid any legacies and protection of the past
Aim for deep engagement
Avoid too strict split in roles, work as a team

159. GOVERNANCE HEADROOM
FRAMEWORK: BOARD COMPOSITION ELEMENTS
159

160. 160
GOVERNANCE HEADROOM
TOOL: BOARD INVOLVEMENT CHECK-LIST
Does the board actively engage with the CEO and top team in development of corporate
strategy, providing judgment and senior perspective and approval of strategy?
Does the board support the CEO in major periodic performance reviews with the top team
including challenging aspirations and performance?
Does the board assist the CEO in senior management reviews; help set performance standards;
proactively counsel CEO on senior management development and succession planning?
Does the board help the CEO and top team transform culture of providing external
perspectives and judgment and modeling behaviors; encourage injection of external
perspectives in company processes?
Does the board provide external access?

161. GOVERNANCE HEADROOM
161
SOURCES
READING
VIDEO
Business Knowledge Resource online
www.business.gov.in/corporate_
governance/index.php
N/A
eHOW, What Is the Purpose of
Corporate Governance?
www.ehow.com/about_6630366_
purpose-corporate-governance_.html
Organisation for Economic Co-operation
and Development
www.OECD.org
United Nations ESCAP
www.unescap.org/pdd/prs/
ProjectActivities/Ongoing/gg/
governance.asp

162. 162
INNOVATION SYSTEMS
Organizing the company into innovation projects and ventures, with tracking
systems that stimulate risk taking, small failures, learning and improvement, that
leverage the wisdom and insights from the entire organization, customers and
suppliers, and are fueled with patient funding

163. INNOVATION SYSTEMS OVERVIEW
163
SELF ORGANIZING
SYSTEMS
LEARNING LOOPS
LEVERAGE THE
CROWD
PATIENT FUNDING
For innovation or
adaptability, the principle
of emergence and selforganizing systems
becomes valuable
Innovation is a path of
discovery, consisting
of rapid, consecutive
cycles of best-efforts
trial, surprise insight,
adjustment and next trial
The “crowd”, customers
in particular, but also
competitors, suppliers,
professionals, academia,
and financiers, provides a
great platform for cocreation, and support for
roll-out
Manage the innovation
portfolio separate, in a
“VC-like” manner, with
sufficient patience
PAGE 164
PAGE 175
PAGE 185
PAGE 199

164. 164
SELF ORGANIZING SYSTEMS
FOR INNOVATION OR ADAPTABILITY, THE PRINCIPLE
OF EMERGENCE AND SELF-ORGANIZING SYSTEMS
BECOMES VALUABLE
“In our organization each process is defined so
precisely that it is difficult to step out”
“We are a traditional silo organization which works well, I
don’t know where to start to stimulate cross pollination”
“There are no incentives to step out our usual way of
working”

165. SELF ORGANIZING SYSTEMS
ESSENCE: DRIVE TOWARDS HIGH VALUE WORK
Source Picture: Stroh, J. Retrieved October, 2012, from jarche.com
www.jarche.com/wp-content/uploads/2012/10/fractal_JoachimStroh.jpg
165

166. 166
SELF ORGANIZING SYSTEMS
KEY INSIGHTS
For innovation or adaptability, the principle of emergence and self-organizing systems become
valuable. This means to use spontaneous coordination through the self-interested behaviors
of the employees and rules embedded in the way of interacting instead of the traditional formal
and well-structured management processes to deliver and control outputs
Hierarchy and silos are the largest impediment to innovation. Large corporates stumble
because of internal complexity. Instead of finding the optimal structure, try to avoid it
Various alternative coordination mechanisms exist including performance transparency,
internal markets, projects, shared values, externalization of functions and coordination
platforms

167. SELF ORGANIZING SYSTEMS
KEY INSIGHTS: SILOS ARE OFTEN THE BIGGEST OBSTACLES
I strongly believe innovation is a team sport. The 2004 National Innovation Initiative report
observed that innovation “is multidisciplinary and technologically complex. It arises from
the intersections of different fields or spheres of activity.” That is why it often takes a group of
people who are not only highly talented but who bring together diverse skills and points of
view in order to successfully tackle the kinds of complex problems we face in the 21st century.
But perhaps even more important, a collaborative approach to innovation helps provide the
energy and emotional support that new ideas need in their very early stages. New ideas are
almost always rough and ill-formed at first. Nothing works better than bouncing ideas off other,
supportive people.
This back-and-forth dialogue is crucial in helping to shape the idea into something more
concrete, understandable, and actionable. Then it is more ready to face the tougher challenges
and criticisms from line management and others in the organization. That is why isolating
people in organizational silos is one of the biggest obstacles to innovation.
Companies that are serious about innovation do everything possible to break down silos and
encourage communication and collaboration across the organization and beyond. Fostering
innovation is very hard, especially if the innovation is disruptive in nature. A spirit of innovation
and collaboration does not come naturally to an organization. For such a spirit to take hold,
it must become an integral part of the company’s culture. None of this is easy, but it is what a
company must do.
Source: Wladawsky-Berger, I. Retrieved August 22, 2008, from Business Week
www.businessweek.com/stories/2008-08-22/the-challenges-of-innovationbusinessweek-business-news-stock-market-and-financial-advice
167

168. 168
SELF ORGANIZING SYSTEMS
KEY INSIGHTS: LET GO OF BUREAUCRATIC CONTROL
Management structures to coordinate activities
are limiting the engagement, cross-pollination
and capabilities of employees, which are especially
important for innovation
So when innovation becomes more important,
stimulating the principle of emergence and selforganizing systems rather than direct bureaucratic
control
Example traffic system in Drachten, NL:
Municipality took away traffic lights, pedestrian barriers, road markings and cycle lanes
and created instead a “shared space” for all users of the road network
Not only did the safety record go up but the speed of movement improved as well.
Everyone got used to being a bit more careful
Source: Birkinshaw, J., and Goddard, J. What is your management model. Retrieved January 01, 2009, from Harvard Business Review
www.hbr.org/product/what-is-your-management-model/an/SMR307-HCB-ENG

169. SELF ORGANIZING SYSTEMS
FRAMEWORK: ORGANIZATIONAL STRUCTURES
169

170. 170
SELF ORGANIZING SYSTEMS
KEY INSIGHTS: ALTERNATIVE COORDINATION SYTEMS
Performance transparency: provide employees with all information required to make
informed own decisions
Internal markets: create markets for jobs, assignments, staffing, investments
Projects: organize around projects from one staffing pool
Shared values: embed shared values as compass to make right decentral decisions without
need for consultation
Externalization/virtual organizations: outsource activities to create freedom to act and survive
Collaboration platforms; stimulate information sharing and mutual support

171. SELF ORGANIZING SYSTEMS
KEY INSIGHTS: THE GORE CASE (1/2)
W.L. Gore Associates, known mostly for its GoreTex range of high-performance fabrics, the company
makes more than 1,000 products and employs
9,000 in 50 locations around the world. Wherever
it operates, Gore is frequently ranked as one of the
best possible places to work. Also in 50 years it has
never made a loss
The core elements of Gore’s model: a collaborative decision-making process, an organization
where leaders aren’t appointed but emerge from below, associates that have the knowledge and
authority to make the critical real-time trade-offs
Associates are all owners in the company. Gore associates self-commit to what they want to
work on. Rather than having a boss tell them what to do, they decide what they want to work on
and where to make the greatest contribution
Rather than relying on a top-down appointment process, the organization determines who
qualified to be a leader, based on the willingness of others to follow, based on a peer review
process. The leader is not expected to be the most knowledgeable person on the team.
Instead he/she wants to tap into the whole organization and distributes responsibilities to the
associates who have the relevant knowledge. Gore resist titles, as it would put leaders in a box
and a position where they assume authority to command others. The leader’s job is to make
sure the culture is healthy: Is it working as a system? Are teams coming together? Are we getting
diverse points of view? Are the best ideas rising to the surface? Their contribution is to help the
organization scale and be effective.
Source: Gary Hamel
www.garyhamel.com
171

172. 172
SELF ORGANIZING SYSTEMS
KEY INSIGHTS: THE GORE CASE (2/2)
People have the right to challenge, they have the
right to know why a decision is the right one for
the company. The leader has constantly to explain
the rationale behind decisions, and to put it in
the context of our culture. The most impactful
decisions at Gore are made by small teams. Teams
take a lot of time to come together, to build trust and
to build relationships
Each associate gets a sponsor. A sponsor makes a personal commitment to an associate’s
success and development
Gore likes to have all core functions co-located in its factories because innovation depends on
having research, manufacturing and sales all in the same place, where they can build off each
other. It also likes to split businesses that get too large—more than 250 or 300 people—to
avoid the sense of ownership, the involvement in decision-making, the feeling that one can
make an impact starts to get diluted
To drive discipline at Gore, everyone in the organization will be ranked by their peers, and their
compensation will depend on this ranking. Typically, an associate will be evaluated by 20 or
30 peers and will, in turn, evaluate 20-30 colleagues. You rank your peers from top to bottom.
It’s a forced ranking. Gore does not tell its associates what criteria to use, but simply asks them
to base their ranking on who’s making the greatest contribution to the success of the enterprise.
A committee of individuals with leadership roles put together an overall ranking. In setting
compensation, the folks who are making the biggest contributions are also making the most
money

173. SELF ORGANIZING SYSTEMS
173
TOOL: ORGANIZATIONAL EFFECTIVENESS TEST
Empower
Do you have the
mandate to act?
Enable
Do you have the
information and means
required?
Command
Do you understand
and buy in to the
direction and the
performance
bar?
Control
Has a safety net been
put in place under you?

174. 174
SELF ORGANIZING SYSTEMS
SOURCES
READING
VIDEO
6 Ways to create a culture of innovation,
Fast co design
www.fastcodesign.com/1672718/6-waysto-create-a-culture-of-innovation?utm_
content=buffer03e33utm_
source=bufferutm_
medium=twitterutm_campaign=Buffer
N/A
Get self organized, Harvard Business
Review, 2004
INSEAD case study: Transforming DNV:
From Silos to Disciplined Collaboration
across Business Units – Changes at the
Top
The art of the intrapreneurship
www.linkedin.com/today/post/
article/20130701110415-2484700the-art-of-intrapreneurship?utm_
content=buffer73394utm_
source=bufferutm_
medium=twitterutm_campaign=Buffer

175. 175
LEARNING LOOP
INNOVATION IS A PATH OF DISCOVERY, CONSISTING
OF RAPID, CONSECUTIVE CYCLES OF BEST-EFFORTS
TRIAL, SURPRISE INSIGHT, ADJUSTMENT AND NEXT
TRIAL
“We only launch our concepts at large scale and when
they are 100% complete to prevent reputational losses”
“Once we have launched the concept – we hardly
change it anymore”
“We only look at the sales number when launching a
new product – it’s not very clear and easy to measure
other things”

176. 176
LEARNING LOOPS
ESSENCE: APPLY CONTINUOUS DEVELOPMENT
Google has 45% of it’s products in BETA (22 out of 45 )
Alerts
Calendar
Blog Search
Docs
Book Search
Gmail
Google Chrome
Knol
Finance
Orkut
Google Health
Talk
Patent search
Translate
Product Search
Google Pack
Scholar
Base
Video
Image Labeler
Custom Search
News Archive Search
Source: Pingdom. “Why is almost half of Google in beta?”. Royal Pingdom. 24 September 2008
royal.pingdom.com/2008/09/24/why-is-almost-half-of-google-in-beta/ http://royal.pingdom.com/2008/09/24/why-is-almost-half-ofgoogle-in-beta/

177. LEARNING LOOPS
KEY INSIGHTS
Innovation is a path of discovery, consisting of rapid, consecutive cycles of best-efforts trail,
surprise insight, adjustment and next trial. Because innovation cannot be designed with
precision but has to be “stumbled upon” this sequence of learning loops is necessary
Forecasting innovation is riddled with false assumptions. This is true even for professionals
like Venture Capitalists. Hence constant piloting and pivoting
Experiments need to include multiple options, including “far out” ones, that can open
completely new opportunities. This way the enterprise avoids getting locked in to optimizing a
suboptimal solution
Online businesses are ideally positioned for high frequency of learning because of real time
tracking of results.
177

178. 178
LEARNING LOOPS
KEY INSIGHTS: TESTING AND LEARNING
FALSE ASSUMPTIONS
Revealed through
asking “why?” and
checking underlying
rationale
EXAMPLE
KNOWN UNCERTAINTIES
Validated through
hypothesis testing
EXAMPLE
UNKNOWN UNKNOWNS
Discovered
through prototype
experimentation
EXAMPLE
Customer is price
sensitive because of
budget constraints
This product concept
might break down
This product is targeted
to adults
Actually they have
substantial budgets
Actually it works really
well
Actually it appeals to
youngsters

179. LEARNING LOOPS
KEY INSIGHTS: EXAMPLES OF LEARNING LOOPS
Engineering firms building a model of a new factory to brainstorm and test various
configurations and process flows
A TV channel constantly making programming and content changes and tracking impact on
viewership the next day
An e-commerce company constantly adapting its web pages to keep improving click through
rates
An insurance company constantly changing the scripts for its telephone sales force and tracking
lead conversion performance
Note that all these examples can include a combination of continuous incremental
improvement plus infrequent “far out” experiments
179

180. 180
LEARNING LOOPS
KEY INSIGHTS: ONLINE TRACKING AND VIRAL MARKETING
Social sentiment, website usage, digital test, online surveys – these are all very low cost, real
time, very granular tracking methods of any change in product or service offering
Corporations are starting to build good experience with taking online customer engagement
seriously, involving customers in beta testing, constantly collecting their feedback, and
responding in the open to their complaints
Online experimentation has the additional benefit; beta launches that hit the bull’s eye can
trigger powerful viral marketing effect, whereas failed experiments that are withdrawn die
quickly in terms of online buzz

181. LEARNING LOOPS
FRAMEWORK: LEARNING LOOP OF CONTINUOUS EXPERIMENT
Source Picture: Porembiński, K. Retrieved June 28, 2008, from Flickr
www.flickr.com/photos/paszczak000/2672829276/
181

182. 182
LEARNING LOOPS
FRAMEWORK: INNOVATION SHARK
Combining hypothesis and experimentation

183. LEARNING LOOPS
TOOL: RAPID PROTOTYPING
Launch prototype
Track results and derive learning
Test performance on key output metric
Look for unexpected results (especially in the detail)
Collect negative feedback from test users
Engage users in co-creation: invoke suggestions
Repeat ideation
Make a tangible prototype (crude assembly, fab lab, 3D
print, Lego, beta website, etc.)
Launch it in by handing it to customers
Review initial assumptions – what was a surprise?
Design new variations,: more of what seems to work
well, plus new surprise additions
Change prototype and test changes
Don’t waste time on writing reports or internal meetings
Focus on getting results. Tweak the prototype quickly
and launch a new test run
183

184. 184
LEARNING LOOPS
SOURCES
READING
VIDEO
Startup Metrics for Pirates (Dave
McClure)
www.slideshare.net/dmc500hats/
startup-metrics-for-pirates-long-version
Authors@Google: Eric Ries “The Lean
Startup”
www.youtube.com/
watch?v=f EvKo90qBns
Closing the delivery gap, Bain Co.
www.bain.com/publications/articles/
closing-the-delivery-gap-newsletter.aspx
Why the lean start-up changes everything.
Steve Blank, Harvard Business Review
Tom Hulme, IDEO at G8 Innovation
Conference
www.youtube.com/
watch?v=kSLK3A1Kbl8
The lean start-up, Eric Ries

185. 185
LEVERAGE THE CROWD
THE “CROWD”, CUSTOMERS IN PARTICULAR, BUT
ALSO COMPETITORS, SUPPLIERS, PROFESSIONALS,
ACADEMIA, AND FINANCIERS, PROVIDES A GREAT
PLATFORM FOR CO-CREATION, AND SUPPORT FOR
ROLL-OUT
“Less than 10% of our new ideas and concepts are
coming from outside”
“We prefer work with partners in a robust JV style”
“We did do a crowdsourcing effort but we got too many
ideas from too many contributors and we failed to
engage them throughout the process”

186. 186
LEVERAGE THE CROWD
ESSENCE: USING THE CROWD FOR TECHNOLOGY DEVELOPMENT
Innocentive provides a website
where companies can post
scientific problems to be solved
by individuals
Winning outcomes receive
money prices
Most problems are solved by
students or other people with
scientific interest
Source Picture:
www.innocentive.com

187. LEVERAGE THE CROWD
ESSENCE: USING THE CROWD FOR CO-CREATION
Magazine Você
Brazilian electronics and home ware retailer
ML created a new platform “Magazine Você”
Here people can create their own mini stores on
the social networking sites, stocking them up
with 60 items from ML’s inventory
Within 2 weeks, 20.000 people opened online
stores with 40% higher conversion rates than the
traditional ecommerce channels
Source Picture:
www.magazinevoce.com.br
187

188. 188
LEVERAGE THE CROWD
ESSENCE: USING THE CROWD FOR CO-CREATION
Walmart Lab– Get on the shelf
Walmart reached out to both established
businesses and new innovators with the “get on
the shelf ” contest, to uncover the next products
to be stocked
The “American Idol”-like contest that attracted
more than 4,000 products from inventors,
entrepreneurs and small businesses across the
nation
During 2 voting rounds, over 1 million votes
were cast
Source Picture:
https://getontheshelf.walmart.com

189. LEVERAGE THE CROWD
ESSENCE: USING THE CROWD FOR CO-CREATION
Quirky
Quirky offers co-creation along the whole
process from ideation to sales
Every contribution is free, if you want to upload
your idea, you pay a small fee. The reward is
a revenue share of the products developed,
depending on the level of influence you have
87.000 designs have been submitted, 360.000
registered users
Source Picture:
www.quirky.com
189

190. 190
LEVERAGE THE CROWD
ESSENCE: USING THE CROWD FOR COMMERCIALIZATION
3M’s Lead User products show greater commercial promise
Source: Lillen Et Al, Surgical instruments example

191. LEVERAGE THE CROWD
KEY INSIGHTS
Different objectives are recognized: market intelligence, technology development, co-creation
and commercialization
Some customers are much more important (factor 100) than others in engaging with the
brand and in influencing others, and it pays to identify these and engage them directly
191

192. 192
LEVERAGE THE CROWD
KEY INSIGHTS: LEVERAGING THE CROWD COMES IN MANY FORMS
EXAMPLE MODELS
OBSERVED ACTIVITIES
DIGITAL OR PHYSICAL SHELVING WITH CUSTOMERS
BRICKS AND
MORTAR
INNOVATION
CENTERS/
STORES
PRODUCT PROTOTYPING, TESTING, TASTING WITH
CONSUMERS
PARTICIPATORY PRODUCT RESEARCH/DEVELOPMENT
LAB
PRODUCT ARCHIVE/ LIBRARY
CONSUMER INSIGHTS/RESEARCH
IDEA SHARING AND POSTING
DIGITAL
CONSUMER
COMMUNITIES
CONCEPT TESTING
CONCEPT PRIORITIZATION
CONTESTS FOR DESIGNS/RECIPES
EXTERNAL PARTNERSHIPS FOR DESIGN/RD
DIGITAL
CONSUMER
COMMUNITIES
COLLABORATIVE INTERACTION BETWEEN
MANUFACTURER, VENDOR, CONSUMER, CUSTOMER
SCAN OF INTERNATIONAL AND PARALLEL INDUSTRY
TECHNOLOGIES AND BUSINESS TRENDS
USER-CREATED/VETTED ADS
COLLABORATIVE/
SOCIAL
MARKETING
VIRAL MARKETING
SOCIAL MEDIA / CROWD-SOURCING (E.G., FACEBOOK,
TWITTER)
LEVERAGING EMPLOYEES AS SOURCE OF IDEA
EMPLOYEE
COLLABORATION
GENERATION
EMPLOYEE INNOVATION COMPETITIONS
EXAMPLE COMPANIES

193. LEVERAGE THE CROWD
KEY INSIGHTS: THE ECOSYSTEM IS NOT HOMOGENEOUS
Only 1% of the people in any kind of community
create content (i.e., reviews, commentary,
perspectives) and generate the majority of the
output
9% edit or modify that content
90% view the content without contributing
Source Picture: Life of Riley. Retrieved September 5, 2011, from Wikipedia
www.en.wikipedia.org/wiki/File:1percentrule.svg
193

194. 194
LEVERAGE THE CROWD
KEY INSIGHTS: ON AVERAGE 500X EXPOSURE
Source Picture: NM Incte Retrieved December, 2013, from nmincite.com
www.nmincite.com

195. LEVERAGE THE CROWD
TOOL: NET PROMOTER SCORE
Question: How likely is it that you would recommend this product or brand to a friend or
colleague?
Source: The Net Promoter Score and System. Retrieved December, 2013, from netpromoter.com
www.netpromoter.com/why-net-promoter/know/
195

196. 196
LEVERAGE THE CROWD
TOOL: SOCIAL NETWORK ANALYSES
Key scientific contact. Many
contacts, not yet a “big shot”
and relatively easily accessible
Source Picture: Retrieved December, 2013, from Wikipedia
www.en.wikipedia.org/wiki/Social_network_analysis_software

197. LEVERAGE THE CROWD
TOOL: DIFFERENT STRUCTURES
Broadcasted academic collaboration topics
Small laboratories close to universities or on
grounds
Web-based community platform
Spin-in and scanning network of VCs and partners
Experience testing labs
Connect-and-develop web platform
197

198. 198
LEVERAGE THE CROWD
SOURCES
READING
VIDEO
Fronteer strategy
www.slideshare.net/Fronteer/fronteerstrategy-5-guiding-principles-110426presentation
Charles Leadbeater: The era of open
innovation
www.ted.com/talks/charles_leadbeater_
on_innovation.html
How PG triples its innovation success
rate, Harvard Business Review, June 2011
www.hbr.org/2011/06/how-pg-tripledits-innovation-success-rate/
Clay Shirky: Institutions vs. collaboration
www.ted.com/talks/clay_shirky_on_
institutions_versus_collaboration.html
The next step in open innovation,
McKinsey Quarterly review, June 2008
Which kind of collaboration is right for
you? Harvard business review, December
2008
www.hbr.org/2008/12/which-kind-ofcollaboration-is-right-for-you/

199. 199
PATIENT FUNDING
MANAGE THE INNOVATION PORTFOLIO SEPARATE, IN A
“VC-LIKE” MANNER, WITH SUFFICIENT PATIENCE
“We often have multiple projects for longer period of
time on “orange” – we don’t have the guts to “kill” them”
“We typically invest too much too early on raising too
high expectations that never can be met”
“We develop and test some innovative concepts left and
right, thought we don’t have an innovation “pipeline”

200. 200
PATIENT FUNDING
KEY INSIGHTS
Innovation is a learning process; accumulated insight leads to ultimate success. VCs tend to
lose money on their first investments in a new area
Radical innovation portfolios typically “get in the money” after year seven. Almost all
corporate venture funds are discontinued afer 5 years
Stage gate funding is the right process for continuous pruning, if applied with rigorous
discipline and external metrics

201. PATIENT FUNDING
KEY INSIGHTS: REALLOCATE FUNDS WITHIN PORTFOLIO
Source: How to put your money where your strategy is. McKinsey Quarterly, March 2012
www.mckinsey.com
201

202. 202
PATIENT FUNDING
KEY INSIGHTS: SUCCESS FACTORS OF VCs
Select a portfolio within one area of opportunity, to accelerate learning and build network
access
Pick the right industries - this is superior to the right individual ventures
Stay independent from corporate pet products and strategy or synergy considerations
Use objective, external metrics of progress. Forecasting is useless, only progress matters
Stimulate frequent pivoting
Increase funding per stage gate
Push for go and no-go decisions rather than recycling; decide on “right concept, right team,
right time”

203. PATIENT FUNDING
TOOL: OPTIMAL PORTFOLIO
Optimize portfolio on risk/return levels and time horizons
203

204. 204
SOURCES
READING
VIDEO
There is good money and there is bad
money. Harvard Business Review
N/A
New project development stage gate
overview
www.slideshare.net/danzyger/newproduct-development-stage-gate-processoverview
The art of managing innovation risk. June
2013, Accenture
www.accenture.com/us-en/outlook/
Pages/outlook-journal-2013-art-ofmanaging-innovation-risk.aspx?c=mc_
myoutlook2_10000115n=emc_0613
Why “Low Risk” Innovation Is Costly.
Overcoming the Perils of Renovation and
Invention. Accenture
How to put your money where your
strategy is. McKinsey Quarterly, March
2012

206. INNOVATIVE ENTERPRISE ESSENTIALS
At THNK, we believe that build industry leadership through innovation and that the ability of a company to innovate can be deliberately
orchestrated. We have discovered from our collaborations with entrepreneurs, corporates and in-depth research that continuous innovation
requires a congruent approach between creative leadership, strategy, and organization. We framed these in 5 essential characteristics that
determine whether your organization can innovate on an ongoing basis
This book covers these 5 essentials in detail. Each essential provides you with a framework to guide your thinking on innovation, highlights
the most critical insights for successful adaptation and offers you tools to develop and test your ideas before putting these into practice. The
essentials can be worked with on an individual basis, though they will come best to life as part of a THNK program
THNK is a leadership school in Amsterdam
offering a part-time creative leadership
program. The next generation of leaders
must be creative. With curiosity, courage,
and power needed to develop new ideas and
solutions.
Meno is member-at-large co-founder
of THNK. He is former Director at
McKinsey Company, former board
member of New Venture, NEMO and
other organizations.
menno.vandijk@thnk.org
www.thnk.org
hella.schmidt@thnk.org
ISBN 978-1-291-67398-2
90000
9 781291 673982
Hella is a core faculty at THNK. She
brings a broad blend of experiences
to the Accelerator program, ranging
from structural engineering at ARUP,
to commercial finance at Shell, and
organizational transformations at
McKinsey.