Five Principles for Building Innovation Capabilities Learn Build - - PowerPoint PPT Presentation

Five Principles for Building Innovation Capabilities

Tendayi Viki

PhD MBA

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Situations emerge in the process of creative destruction in which many firms may have to perish that nevertheless would be able to live

• n vigorously and usefully if they

weather a particular storm...

Joseph Schumpeter

1883-1950 Author – Capitalism, Socialism and Democracy

The basic problem confronting an

• rganization is to engage in

sufficient exploitation to ensure its current viability and, at the same time, devote enough energy to exploration to ensure its future viability...

James G. March

Stanford Professor Author – Explorations in Organizations

The fear of cannibalizing sales of existing products is often cited as a reason why established firms delay the introduction of new disruptive technologies...

Clayton Christensen

Harvard Professor Author – Innovator’s Dilemma

Meanwhile At An MBA Near You...

Disrupting Education

Searching While Executing

Innovation =

+

An Innovation Ecosystem

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Principle 1 - Innovation Thesis

We invest in large networks of engaged users, differentiated by user experience, and defensible through network effects.

Fred Wilson

Venture Capitalist Union Square Ventures

Principle 2 - Innovation Portfolio

A Balanced Portfolio

A Couple of Years Back...

We now have several internal global initiatives aimed at redressing this imbalance...

Principle 3 - Innovation Framework

Idea Explore Validate Grow Sustain Retire

Practice Jobs to Be Done Business Model Design Customer Development Minimum Viable Products Growth Engines Sales Forces Optimizations Feature Building Focus Early Adopters, Early Majority Late Majority, Laggards Duration Days Weeks Months Years Metrics Lean Analytics, Pirate Metrics Revenues, Profit-Margins, ROI, IRR, NPV

Idea Explore Validate Grow Sustain Retire

The Lean Product Lifecycle

A Nonlinear Process

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An accountable, focused group making clear data driven decisions

The Product Council

Principle 4 - Innovation Accounting

Product Council

Investment Approval Thresholds*

RIGHT SIDE: Product-Market fit with a working business model Increase transparency of mature investments to ensure alignment to strategy LEFT SIDE: Validate assumptions and hypotheses Reduces the risk of wasted investment and allows teams to pivot to new and better ideas

*Amounts need to be validated, by Business Model, and are subject to the thresholds established by the Schedule of Authority

Explore Grow

Quarterly Quarterly

Validate Sustain Retire Idea

<£50k

to Explore

<£250k

To Validate

Financial validation template required to secure

• ngoing investment

Investment Governance

Product Council Product Council

Explore

✓

Can you identify a core user problem in a target market? Have you validated customer and learner needs in context? Can you demonstrate Product/Market Fit or validated business model?

Validate Idea

✗

Product Council

✓

✗

<£50k <£250k

Sustain

Quarterly Performance Review Quarterly Performance Review

Product Council

Grow

Product Council

Retire

Quarterly

Product Council

Quarterly

Investment Governance

Reducing Investment Risk

Funding & Evidence Risk

Time

Idea Explore Validate Grow

Moneyball for Innovation reworked on slide 11

£0 £<50k £<250k £ P&L ✓ ✗ ✗ ✗ ✓ ✓ ✓ ✓ ✓ ✓ ✗ ✗ ✓ ✓ ✓ ✓ ✓ ✓ ✗ ✗ ✗

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Principle 5 - Innovation Best Practice

The PLC Ecosystem

Playbook to support adoption

• f best practice

Training to establish cohorts

• f embedded coaches across

each area of the company Communities to help share best practices and deepen cultural impact Product Councils to manage investments using PLC criteria Templates, Reports and Portfolio tools for Product Teams and Investment Councils

http://learn.leanplc.com/

http://thecorporatestartupbook.com/

Thank You

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