Tips for innovation; How companies small and large stay ahead of their competition
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This talk was delivered by Chirag Kulkarni, the CEO of C&M Group, to Fordham Universities MBA program. C&M Group is a global strategy consulting firm focused on growth and new product innovation for startups to Fortune 500s.
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Tips for innovation; How companies small and large stay ahead of their competition
- 1. Tips for Innovation How companies small and large stay ahead of their competition Chirag Kulkarni @cgkulks CEO of C&M Group
- 2. Who am I? Serial Entrepreneur, advisor, Motowner
- 6. 1.Purpose 2.People 3.Process 4.Product
- 7. 1. What is your purpose • Why do you exist? “To bring inspiration and innovation to every athlete in the world” “To inspire and nurture The Human Spirit – one person, and one cup at a time”
- 8. Difference?
- 9. Emphasis on mission, not money!
- 10. The STR story • Early Startup • Money > Mission • Cost Cutting vs. Customer Service
- 11. • Kevin Systrom – Founder of Instagram • Build a community
- 12. 2. People Care? Retention? Empowerment? Growth?
- 13. • John Pepper – Founder • Operated like a typical fast food chain • Realized people do tedious jobs • Improved: Salary for employees, benefits
- 14. People #2 • Hire right from the start • Focus on transparency vs. dominance • Encourage new ideas
- 16. 3. Process • How NOT to Innovate • Linear Model
- 18. Process – How to Innovate • Bring people together • People = catalyze innovation • Horizontal vs. Vertical Management • Market Pull
- 19. • Group of Entrepreneurs • Gap in consulting industry • “Entrepreneurial Consulting for entrepreneurial organization”
- 20. • Partner network • 60% of revenues • “We help you, you help us “
- 21. 4. Product • “Look in the future by looking deep in the present; real needs, issues, from the top to bottom” - Hal Gregersen, Insead • More value for the same products
- 23. Thoughts on Product • Jump the curve • Iterate, iterate, and iterate • Customer feedback
- 25. Questions? Chirag Kulkarni @cgkulks Chirag@chiragkulkarni.com
Editor's Notes
- Founder of a few companies such as STR, Mingle, C&M Group. I am also an advisor to a few companies such as an ed-tech company BookBoi, a social media analytics company called Snip.ly, and ACE Global, a company that helps students from different countries (such as China) assimilate to the American culture through interactive sessions with international students that have done it before.
- The million dollar questions that everyone loves to talk about. In my opinion, many people glorify it. So, what is innovation?
- Who recognizes this character? C’mon guys. This is Sherlock Holmes, and simply put, he is looking for clues. Think about it like this – innovators or innovation is not some magical term that appears from nowhere. It is rooted from scenarios and situations that are known and unknown. I like to think of innovation as the unknown knowns that exist. Think of a bunch of dots. There are all these dots, but only some are visible to managers and executives. Usually it is the innovators job to discover the dots that may be automatically ignored or disregarded for whatever reason
- For every business, the following three components fall into the DNA of a company; 1. People, 2. Process, 3. Product. Examples – Mingle which was a strategic networking app focused on strategic connections between people. The people were the individuals at events, cofounders, conference organizers, etc. . Our process was connecting with events, paying them x amount, and then getting access to their attendees. Our product was the fremium model app itself. Example 2; Loui’s cake and bake shop – People – customers, owners, managers, individuals that delivered product. Process – signature lemon pie, so process was making the pie, but involved getting the ingredients from a distributor. Product was what was sold to the customer. As I mentioned previously, Innovation is not complex, but people like to overcomplicate things. The first point that is missing in this chain that defines a company is….
- IT’s purpose!
- The purpose is the definition of why you exist as a company. For example Nike’s “reason for existence” was to bring inspiration and innovation to every athlete in the world”. Starbucks “reason for existence” is to inspire and nurture the Human Spirit - one person and one cut at a time.”
- How many people in here are built a startup in their life time? If you haven’t, first of all you should – take it as a side project while you are studying in the business school. You will learn so much about yourself, and how hard it actually is. For those of you that have not every built a startup, let me paint a picture for you. It is a grueling process that involves a lot of sleepless nights, hard work, disappoints, and very commonly, depressive states. However, the one thing that it does teach you is to appreciate the little wins. For example, when something you have tested in the market finally, after days of hard work gets noticed by someone you haven’t cold called, it is a great moment. Anyways, STR was a company that provided cost- cutting tennis racquet stringing services. This company was purely operational. At first, I lowered the cost, improved the operations in comparison to big box stores, and focused directly on one thing – MONEY. What happened was I had absolutely no culture, no importance to employees, just a cost cutting guy running this business. Even though we were extremely profitable especially after 3 months of operations, I realized that there was more that could be achieved. Especially after I found out that one of our stringers was stringing for himself and directing the profits to himself, I realized that really needed to be a change in the operations. Eventually, I decided to focus on one thing “Quality Racquet Stringing at Affordable prices” . What’s the problem with this? It ONLY TALKS ABOUT PRICE? Later on, I added in points about the impact and quality of stringing, especially because all of our players were tennis players.
- During a Y-combinator talk, Kevin, talked about the founding of Instagram. One thing that many people were upset about regarding both Facebook and Instagram was it did not have a revenue model attached. Which meant it was valuated based on simply users. Why was this Kevin’s approach? Kevin brought together some early adopters of Instagram, which happened to all be photographers and designers who were very passionate about what they were doing. He built a community around Instagram, and focused his efforts entirely on fulfilling that mission.
- How many people have worked in a company, small or large before? What are some questions that these individuals ask during interviews. Generally, the following questions are asked. Will I be cared for? What is the retention rate at the company? Will I be empowered as an employee? Will I grow both professionally and as an individual? This can all be summarized in CREG – funny enough, I have had many nicknames in my lifetime, such as chiggy bear, charlie, and the one thing, mainly our friends at Starbucks think of when they see Chirag is Craig. So those 4 questions can be summarized into CREG.
- John Pepper, who is the founder of Boloco, a fast-casual burrito chain HQ’d in Boston said that you used to run his resturant like a typical until one day he mopped the floor. Now on a country wide mission to change the way employees are paid. The minimum amount they are now paid is 12 dollars an hour.
- My second point on people focuses on hiring the right people from the start. Peter Theil the cofounder of PayPal said that when he was looking to hire for PayPal, he was finding people that were the most passionate in regards to digitizing money, and focused on meeting those people, anyone else, he was less inclined to meet. This adds to a later point which helps companies build passionate teams who’s sole dedication is to make the entity better. This means people are willing to push ideas from the bottom up Transparency is a topic that is highly debated within a company. The innovation goal within transparency stems from being as honest as possible with your customers, so they become a part of your culture.
- Buffer is a great example of this. Buffer is a social media scheduling and analytics tool that allows you to tweet at certain times, analyze when are the best times to tweet. This is a screen shot from bufers blog. Every month they post some stats, which include their MRR, revenue, Cash flow amounts, new users, etc. And guess what? Customers love it. They also get a lot of free press from it too.
- Moving onto process. It’s a fairly broad term, but as we mentioned before, it can mention your way to operational get your product out the door, evaluate customer feedback. Process is defining, in this case, your system to build your product and innovate from within your company. So for some time, we have been talking fairly in depth about hot to innovate. I am going to open up with a brief segment regarding the typical building process within a company, and what is known as the linear model.
- This is an example of the diagram. The problem with the linear innovation process? There is a lot of quality control involved. Which means, it can take years to get your “supposed product” out the door. This slows innovation tremendously. Plus, this example slows innovation because you are suddenly slowing innovation. Instead of bringing people together to work on big issues, you are building out “mini companies” or what I like to call “ mini-failures” within large entities.
- Instead of leaving people, bring them together! For every company, your people are important? So why are they left out of the process? Focus on building a company that encompasses horizantal vs. vertical management. Horizantal means that employees are treated as equals, which encourages people to talk and discuss ideas that may be problematic or innovations within the company. Lastly, your company should focus on market pull versus linear model. Market pull encompasses products that are built because customers want the products, not just managers.
- Offers an opportunity to build products quickly and gauage feedback from their network. It also gives it a great opportunity to deliver high quality produts and fix any gaps that may exist because they have a diverse set of people with a diverse set of expertise that they may not have.
- Companies large and small like to bring in smart guys to start talking about innovation. In my opinion, the answers are there. This quote by Hal Gregersen of Insead sums it up fairly well.
- All these products are examples of products that have double the value within the same product. So your cookie jar can finally be turned into a dietician, opening when you program it too. All of your breakfast items can be stored in one to save space; preferably for homes in Boston or New York where space is a serious issue.
- Couple last things on product; build products that are going to seriously jump the curve. I am apart of a couple of startup groups and you will not believe the amount of times that people say “I am going to build a social networking site similar to facebook” or “I a going to build the Uber for XYZ”. As entrepreneurs, and human beings, we have a short amount of time on this earth. Focus on building products that have tremendous value and that actually matter. Focus on impact vs. dollar value, similar to Instagram and Facebook examples. Focus on iteration of your ideas. And getting high quality customer feedback right out the door. Remember, to build for your customers, not just your employees, or managers. Remember, it can start as you building for your employees, but get out the door and talk to customers.
- This is an example of a project I am working on within C&M Group. This is a great example of getting something out there, and driving traffic to your website to gauge customer feedback. My last point ; don’t let the people bog you down. Trust me, the craziest, stupidest questions ultimately turn out to be some of the most valuable pieces of information. Get out there and build great products for customers, and continue to innovate!