innovits corporate catalyst stefano mizio 21 novembre 2013
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Innovation, business models and manager’s role as ‘corporate
catalyst’
Stefano Mizio – Management Board Innovits 21 novembre 2013 MIP – Politecnico di Milano
About Innovits
• InnoVitamins (InnoVits) è un’iniziativa non profit fondata con l’obiettivo di catalizzare lo sviluppo della cultura imprenditoriale supportando idee di business innovative, fornendo strumenti professionali e opportunità di business.
• InnoVits gestisce una gara di idee con l’obiettivo di selezionare, fra tutte, la migliore idea innovativa di business.
• InnoVits è un percorso che accompagna e sostiene gli imprenditori consentendogli di sviluppare e “vendere” la propria idea di business in modo professionale, con il supporto di professionisti di esperienza della community AlumniMIP.
• Innovits offre concrete opportunità di networking e, per le idee migliori, l’opportunità di entrare in contatto con Business Angels e Venture Capitalist in occasione della presentazione finale.
Stefano Mizio
Lean
Startup/business
model
canvas/agile
methodologies
We need
innovation
(Business Model
Innovation)
Large Corporation
are not always
too big to
innovate
Corporate
Catalyst
Agenda
Too big to produce game-changing inventions?
Stefano Mizio
innovate?
Large companies:
Performance Engine
Performance engine strives to make every task, every process as
repeatable and predictable as possible .
Innovation is neither repeatable nor predictable; it’s exactly the
opposite: nonroutine and uncertain
Stefano Mizio
Today – digitally disruptive economy
Stefano Mizio
A computer;
An internet connection;
A programming language and SDK;
A friction-free digital platform for distributing
and making money from you innovation;
…in few years a 3D-printer
That’s all you need to bring your ideas to the
market!
BUT…
Dozens of copycats
Stefano Mizio
Startup #1
Startup #1*
Startup #1**
Increasing ease and decreasing cost of innovation -> short-term pressure (startups)
Stefano Mizio
The new corporate garage?
Big companies have hard-to-replicate advantages
The Challenge
Stefano Mizio Tim Kastelle Blog
Stefano Mizio
Search for a new business model…
David versus Goliath
Stefano Mizio
The rise and the fall of…
Blockbuster
this is the end…
Stefano Mizio
Don’t get Netflixed!
Netflix, netflixed
Stefano Mizio
Verb:
1.to cause disruption or turmoil to an existing
business model
2.To destroy a previously successful business
model
3.To displace the way value is currently created,
delivered, and captured
4.To be disrupeted, destroyed, or displaced by
new business model.
S. Kaplan
The Challenge
Stefano Mizio
You must reinvent a business model while the entire
organization is working hard pedaling the bicycle of
the current one.
Even Netflix is in Danger of being
Netflixed…
Stefano Mizio
The Key Issue:
Stefano Mizio
Business model innovation is a competency
that doesn’t exist in most companies, since it
never had to… …
The new normal is Amazon
INNOVATOR’S PARADOX
Stefano Mizio
and your current Business Model? Scott D. Anthony
Kodak acquired OFOTO in 2001
Stefano Mizio
Imagine if…
Stefano Mizio
Kodak: “ our tagline is Share memories, share
lives”.
“Why don’t we let people simply share album
pictures?..we can create a feature that allows
people to share news items as well”.
But
Kodak didn’t take those steps….
Facebook in 2001??
Kodak’magnete vs OFOTO: The
current business model
Stefano Mizio
T&C:To maintain free storage, you need to meet the following minimum
purchase requirement within 90 days of first uploading images, and then
every 12 months thereafter ... If you do not purchase the required amount
as set forth above from us for a period of 12 months, we may delete the
images stored in your account.
Your core business is a Magnet!
Stefano Mizio
It can take the most power idea and turn it into something
that has been done before
Car2Go business model
Company CEO Robert Henrichcan can be
credited with the founding of the services —
while working at Daimler in a division tasked
with exploring next-generation business
models, he developed and championed the idea that grew into Car2Go.
Take a look at Car2Go
Stefano Mizio
Business Innovation Division The Daimler Lab for new business
models
Stefano Mizio
The Magnet didn’t work!
Car2Go in Milan: 40,000 clients in
few months Fiat, ENI, Trenitalia
“coming soon”
Stefano Mizio
Leassons learned
Stefano Mizio
• Run Experiment (Ulm Germany – internal employees) – Frugal innovation. • Alert to the early warning signs that a business model is facing erosion (car production for Daimler) • Emerging trends : sharing economy + sustainability/green economy. •Organizational Model: Business Innovation Division/ Strong Management Support.
Stefano Mizio
Large Companies
Stefano Mizio
Exploitation
Exploration
New Business
Models
Execution Search
Capabilities Resources
Stefano Mizio
What kind of organization? Spin out organization? Ambidexterity Organization? Partnership?
Organizing an innovation initiative
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Company
Performance Engine
Shared
Staff
Dedicated
Team Partenrship
V. Govindarajan – C. Trimble : The other side od Innovation
TELCO UNDER PRESSURE
Stefano Mizio
Whatsapp: founded in 2009
Stefano Mizio
WhatsApp just surpassed 300 million users worldwide.
Telco senior management were worrying about the risk of cannibalizing
SMS revenue.
Always ask the question: “If I don’t do this, will an
existing or new competitor decide to?”
S. Mizio :VODAFONE ENTRY IN THE MOBILE INTERNET MARKET: COMPETITIVE ISSUES, INNOVATION AND CAPABILITIES - March 2010 - Final Thesis 3 EMBA MIP
http://flickr.com/photo_zoom.gne?id=321433870&size=l Darwin Bell
WALLED GARDEN WAS OVER!
High Rivalry among traditional
competitors – efficiency -
mature sector
Online players like Google have
become a driving force in the
industry.
Dumb pipe risk: operators just
building Freeways for
Californian cars.
In 2008 that was the reality
Trying to avoid being a Dumb Pipe Stefano Mizio
Vodafone Internet Services
VF 360 platform
Vodafone Internet Services
Stefano Mizio
If you look for quick growth, you are forced to
look to what exists
The organizational design seemed a good
fit for the innovation challenge…but
Stefano Mizio
VIS relied too heavily on its Performance Engine to develop
VF360 infrastructure and APIs -> 1° Risk to overestimate
the capabilities of the Performance Engine.
“ One of the biggest problems is that the company still has a ‘handset & base-
station’ mindset”. mobile industry review: vodafone_360_an_absolute_failure
What kind of competencies Acqui–Hiring and the
“organizational memory”
Stefano Mizio
To expand a business the company must expand its inventory
skills…skills that you have never needed before.
Twitter 29 acquisitions since 2009 - 9 startups had received a seed
Stefano Mizio
Develop and act as a venture backed startup with a great
“always beta” culture (Google) implied a different approach (
no waterfall ) -> 2° Risk : different Operating rhythm
…delivering reliable features every 6/8 months costing a lot o
money. That was unfit with Internet time/pace/philosophy
Telco operators are organized to pursue
development effort of different duration
Stefano Mizio
Using existing processes
Little Performance Engines instead of Dedicated teams
Stefano Mizio
No custom organizational model in place
Something missing
Stage gate? Agile
approach? What kind of
relationships?
Ongoing Operation
Innovation
Strategy
Organizing
&
Planning
Execution
Committing to
an Innovative
Idea
Making
Innovation
Happen
V. Govindarajan – C. Trimble : The other side od Innovation
?
“Great idea! Go
make it happen”
Fuji Film
Stefano Mizio
Fuji’s approach: investing in new advantages and
pulling resources from declining ones.
Healthy Disengagement and Resource allocation
The wave of transient advantage
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What to do when you are in the Exploitation phase…
R. Gunther McGrath: The End of Competiitve Advantage
Healthy disengagement
Kodak
Stefano Mizio
Fuji: 25$ billion
2011 and 377th on
Fortune’s Global
500 list.
Kodak has gone
bankrupt.
Fuji didn’t get trapped by its
past.
Stefano Mizio
Stage Gate (uber alles) innovation process and the Net
Present Value perspective.
the Risk averse culture
Are Accountants and CFOs Killing
Innovation?
The Accounting Conservatism
Stefano Mizio
Is it Business Model innovation
really matters?
“Bad things can happen to good technology. And much of what can happen is due to the business model the company uses to commercialize the technology ” H. Chesbrough
Portfolio of Business Models Impact Grid
Stefano Mizio Source: Rethinking Business Model for Innovation
Business Model
B.M. 1
B.M. 2
B.M. 3
Level of
Promise
Risk level (detailed) Risk
Level
(general) Interdependance Technical Risk Financial Risk
Low – Low/Medium – Medium/High – Medium - High
Stefano Mizio
Balancing Short Term and Long Term
Innovation
Source: Rethinking Business Model for Innovation
Stefano Mizio
Integrating different “Time – Horizonts” Innovation Portfolio Management
Source:Managing Innovation Portfolios – Strategic Portfolio Management –R. Ohr and K. McFarthing
Innovation initiatives are deliberate
departures from the past
Ongoing operation (90%
data, 10% unknowns):
central focus is to execute
the plan.
Innovation initiative (10%
data, 90% unknown): the
plan is a hypothesis.
Shifting attention from
data to assumptions
Stefano Mizio
Run disciplined exp.
Companies need to
be learning-
focused and failure
tolerant.
Building a culture
of
experimentation
Or better … disciplined experimentation
Innovations as experiments
Stefano Mizio
Run Disciplined Experiment
V. Govindarajan –C. Trimble – The other side of innovation
Learning :
the process
of turning
speculative
predictions
into reliable
predictions
Stefano Mizio
Modern Day (management)
Neologisms
CORPORATE ENTREPRENURSHIP
ENTREPRENEURIAL ORIENTATION
INTRAPRENEURSHIP
LEAN ENTERPRISE
INTERNAL CORPORATE VENTURING
Stefano Mizio
Intrapreneurship/Corporate
Entrepreneuship Intrapreneurship can be defined as
using entrepreneurial skills without
taking on the risks or accountability
associated with starting your own
business. Instead, intrapreneurs are
employees in larger organizations,
who act as entrepreneurs while
having the resources and
capabilities of the larger firm to
draw upon
Corporate Entrepreneurship: is the
process by which individuals inside
organizations pursue opportunities
without regard to the resources they
currently control (Stevenson) Stefano Mizio
Why startup???
Stefano Mizio
Search for a business model… sound interesting if
you are an established company!
Steve Blank – Customer Development Manifesto
Stefano Mizio
Startup and established company
Steve Blank
55 images by JAM
customer
segments
key
partners
cost
structure
revenue
streams
channels
customer
relationships
key activities
key
resources
value
proposition
Business Model Canvas Stefano Mizio
Product/Market fit
Stefano Mizio IBM’ s global CEO report 2006: business model innovation matters
B Model structure
9 Guesses
Stefano Mizio
Guess Guess
Guess
Guess
Guess
Guess
Guess
Guess Guess
Customer Development Model or How we search for the business Model
Stefano Mizio
Learning and Discovering
Design experiments, start
listening
testing your hypotheses outside the building
Pivot
Search Execution
Steve Blank – Customer Development Manifesto
Holistic Focus on three things
Agile Coaching Blog – David Bland Stefano Mizio
Heart disease is the number one killer in India, accounting for a quarter of
deaths among those aged 25 to 69. Millions are dying due to lack of access to
treatments.
Stefano Mizio
Medical Device Manufacturer
Healthy Hearth model
Stefano Mizio
Innovation commitment
Bring
pacemakerk
tech. to
Indians who
desperately
need it
People who
are unable to
obtain
pacemakers
and other
cardiac
products
External
Partner:
Ashoka (to back
social
entrepreneurs and
support and
finance plan for
pacemakers)
Patient
education
activities
through local
events, text
messaging and
social media.
Hospitals
Internal
partners
Do you believe B. Model is a
tool for startups?
Stefano Mizio
Entrepreneurial
approach/method
Experimentation/ get out of the
building : diagnostic camps to
identify potential patients.
Business Model Validation
Open minded
Observation
( Aravind Eye Care System)
Humility
Unique capabilities
Partner relationships
Strong Brand Reputation: local
doctors/ Regulatory approval/…
“Last mile” distribution
channels
Process and internal resources:
design, staffing and execute
pilots and expanding programs
Recombining existing
capabilities
Stefano Mizio
Managing the Partnership
Dedicated
Team
Performance
Engine
You need the Performance Engine!
Conflicts must be anticipated, mitigated or neutralized
Innovation and Corporation in Italy
what managers say about innovation
Stefano Mizio
WOBI (World of Business Ideas) indagine presentata al World Business Forum di Milano (5-
6 novembre) – 3500 dirigenti di azienda intervistati: WBF L'Italia chiede più innovazione
• la scarsa propensione all’innovazione dimostrata dai manager (40,48%).
• il 49,6% degli intervistati ritiene prioritario per stimolare l’innovazione il giusto approccio
dei manager.
• Solo il 9,9% dei manager pensa che le aziende con una lunga storia siano le più
disposte a innovarsi
Complacency and Fear
Stefano Mizio
In 2001 Nokia engineers about iPod: “ It’s just a hard drive built on
older technology in a fancy case.”
Stefano Mizio
A new Breed of manager
Organizations need a structure and a corresponding culture where
accelerated change is the new normal. It requires an environment, a
strategy in which experimentation and pioneering is the most common
thing to do in order to be able to innovate.
It’s a matter of Perpective
Stefano Mizio
Curiosity + Diversity + Method
The key Point
Stefano Mizio
The limits to innovation in large organization have nothing to do with creativity and nothing to do with technology. They have everything to do with management
capability. Ray Stata – founder and chairman of Analog Devices
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