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Melbourne, June, 2016 Program Overview Dr. Peter C. Wilton [email protected] Building Strategic Innovation Capability Building Strategic Innovation Capability: Insights & Practices The Agenda Program Overview The Strategic Innovation Capability Model Creating the Innovation Imperative Discovering Innovation Opportunities Entrepreneurship & Open Innovation Networks Innovating in a World of Big Data Innovation in Venture Financing Building a Culture for Innovation Building Innovation Commitment Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

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Melbourne, June, 2016

Program Overview

Dr. Peter C. [email protected]

Building Strategic Innovation Capability

Building Strategic Innovation Capability:Insights & Practices

The Agenda

Program Overview

The Strategic Innovation Capability Model

Creating the Innovation Imperative

Discovering Innovation Opportunities

Entrepreneurship & Open Innovation Networks

Innovating in a World of Big Data

Innovation in Venture Financing

Building a Culture for Innovation

Building Innovation Commitment

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability:Insights & Practices

Wednesday, June 1

Monday, July 25

Tuesday, July 26

Wednesday, July 27

Thursday, July 28

Friday, July 29

Program KickoffProgram OverviewIntroduction to the Strategic Innovation Capability ModelThe Innovation Opportunity

Reflection SessionInsights from Individual & Team Assignments

Creating the Innovation Imperative

Defining SuccessPeter Wilton

Lunch (12:30)

8:30

10:0010:15

12:001:00

3:003:15

5:00

Understanding the Innovation SpectrumAssignment: Mapping the Innovation PortforlioSite Visit Briefing & Team Leader Assignments

Break

Break

Creating the Innovation Imperative, cont'd

Setting the Long-Term Stretch GoalRethinking the Business Model AssumptionsCustomer Discovery

Peter Wilton

Break

Depart for Site Visit

Lunch Depart for Site Visit

Break

Depart for Site Visit

Depart for Site Visit

Break Break

Lunch

Break

Program IntegrationKey InsightsFuture ExperimentsFollow-up Review

Peter Wilton

Closing DinnerFree Time Free Time Free Time

Building a Culture for Innovation

Intrapreneurship ModelsLearning Through Failure

Mark Coopersmith

Problem-Framing/ Problem-Solving,

continuedSara Beckman

Discovering Innovation Opportunities

Problem-Framing/ Problem-Solving

Sara Beckman

Building a Culture for Innovation

Intrapreneurship ModelsLearning Through Failure

Mark Coopersmith

Entrepreneurship & Innovation in Silicon Valley

The Silicon Valley ModelEntrepreneurial Leadership

Jerry Engel

Managing Open Innovation NetworksJerry Engel

Innovation in Venutre FinancingGreg LaBlanc

Innovating in the World of Big DataGreg LaBlanc

The Program AgendaSunday, July 24

Business Model Innovation in the Wine Industry

The "Naked Wines" Story

(2:00-4:00 pm)

Free Time

Site Visit to Leading Bay Area Innovator:Frog Design(1:30-3:00)

Site Visit to Leading Bay Area Innovator:Tube Mogul (1:00-3:00)

Site Visit to Leading Bay Area Innovator:Google (10:00-12:45)

Site Visit to Leading Bay Area Innovator:J-Labs (2:00-3:00)

Site Visit to Leading Bay Area Innovator:Autodesk (3:30-5:00)

Drop-In at Bay Area Start-Up Community Space:Galvanize Tech Campus

Site Visit to Leading Bay Area Innovator:TBA(3:30-5:00)

Building Innovation Commitment: The Leadership Role

Managing Parallel Innovation ModelsDeciding Innovation Posture

Peter Wilton

Mitigating Innovation Risk

Tour of Napa ValleyVisit to Local Napa Valley CommunityVisit to Leading California Wineries

(10:00 am - 2:00 pm)

Free Time

Depart Hotel for Silicon Valley

Depart Hotel for Napa Valley

Melbourne, June, 2016

Building Strategic Innovation Capability

The Strategic Innovation Capability Model

Dr. Peter C. [email protected]

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability:Insights & Practices

The Agenda

Program Overview

The Strategic Innovation Capability Model

Creating the Innovation Imperative

Discovering Innovation Opportunities

Entrepreneurship & Open Innovation Networks

Innovating in a World of Big Data

Innovation in Venture Financing

Building a Culture for Innovation

Building Innovation Commitment

Building Strategic Innovation Capability

What Is The Strategic Innovation Capability Model?

An integrated architecture for designing and implementing effective

innovation strategies that sustain organisational resilience.

Three Key Components:

Deciding Strategic Innovation IntentLinking Innovation to Business PerformanceBuilding Innovation Competency

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

The Strategic Innovation Capability Model

Building Innovation

Competency

Deciding Strategic Innovation Intent

Linking Innovation to Business Performance

What do we need to do to stay relevant in an evolving market? What mix of sustaining versus

reframing innovation activity is required to maintain market leadership?

How will our investments into innovation drive

growth, profitability and leadership reputation?

What are the competencies and models we need to build in order to support innovation

throughout the organisation?

How do we link innovation to tangible business outcomes?

Building Strategic Innovation Capability

Deciding Strategic Innovation Intent

How relevant and unique is our current way of creating value for our customers?How could we be disrupted and lose relevance with our customers? What overlooked or underserved approaches to creating value have we not yet seen?When should we reframe value in our industry? When should we introduce entirely new approaches to creating customer value? What happens if we don't?What will happen to our existing business model and organ- isational assets if we shift the focus of value creation and delivery?

What do we need to do to stay relevant in an evolving market? What should be the mix of sustaining versus reframing

innovation activity and what will be their respective roles in maintaining

market leadership?

The Strategic Innovation Capability Model

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Why innovate? What are we optimizing to? Internal efficiency or market effectiveness? How does this choice impact the innovation strategy?What are the drivers of the enterprise's ultimate success: - growth, profitability, leadership reputation, human capital attraction? How does innovation impact these drivers? Where should management attention be focused to get ahead of the performance curve? How do we find the next growth curve? What new business models will unleash our next wave of growth and profitability? How does innovation impact customer loyalty? What type of innovation portfolio is required to build true customer franchise? How does this loyalty translate into tangible benefit to the organization?Should innovation be just another function in the business, or should it be embedded as the core of the operating model?

Linking Innovation to Business Performance

How will our investments into innovation drive

growth, profitability and leadership reputation?

How do we link innovation to tangible business outcomes?

The Strategic Innovation Capability Model

Building Strategic Innovation Capability

The Strategic Innovation Capability Model

Building Innovation

Competency

What are the competencies and models we need to build in order to support

innovation throughout the organisation?

How do we legitimize innovation? How do we create the organisational imperative or sense of urgency for innovating?How do we discover innovation opportunities? How do we find the invisible? How do we prioritize these opportunities?How willing are we to accept that our organization does not have a monopoly on all good ideas? How do we work with others to co-create new forms of value? How do we position ourselves in new industry ecosystems?How do we build a culture where people feel empowered to question the assumptions and behave entrepreneurially? How will we manage innovation risk? How do we learn from failure?How will we manage parallel innovation cultures and governance models (sustaining & reframing)? How will we ensure reframing opportunities are supported effectively?

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

The Strategic Innovation Capability Model

Building Innovation Competency

Legitimizing InnovationDiscovering Innovation OpportunitiesHarnessing Innovation Potential

Building and Managing the Open Innovation NetworkEcosystem Competition & Positioning

The Senior Leadership RoleDeciding Innovation PostureManaging Innovation Risk

Defining Innovation SuccessSetting the Long-term Stretch GoalChallenging the Business AssumptionsCustomer- vs. Resource-Led DiscoveryDesign Thinking

Understanding EntrepreneurshipCorporate IntrapreneurshipUnderstanding & Managing Failure

Creating the Innovation Culture

Building Commitment

Melbourne, June, 2016

Building Strategic Innovation Capability

Creating the Innovation Imperative

Dr. Peter C. [email protected]

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability:Insights & Practices

The Agenda

Program Overview

The Strategic Innovation Capability Model

Creating the Innovation Imperative

Discovering Innovation Opportunities

Entrepreneurship & Open Innovation Networks

Innovating in a World of Big Data

Innovation in Venture Financing

Building a Culture for Innovation

Building Innovation Commitment

Building Strategic Innovation Capability

Deciding Strategic Innovation Intent

How relevant and unique is our current way of creating value for our customers?How could we be disrupted and lose relevance with our customers? What overlooked or underserved approaches to creating value have we not yet seen?When should we reframe value in our industry? When should we introduce entirely new approaches to creating customer value? What happens if we don't?What will happen to our existing business model and organ- isational assets if we shift the focus of value creation and delivery?

What do we need to do to stay relevant in an evolving market? What should be the mix of sustaining versus reframing

innovation activity and what will be their respective roles in maintaining

market leadership?

The Strategic Innovation Capability Model

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

What Is Innovation?

"The willingness to challenge the organisation's assumptions about the most efficient, and effective, way of creating and delivering value to the

firm's attractive customers."

Its not about technology.Its about business assumptions.

Building Strategic Innovation Capability

Traditional Planning

Assumptions

High

Disruptive,Invisible

Assumptions

Low

Low

High

Evolutionary, Invisible

Assumptions

"Clear Field-of-View",

Disruptive Assumptions

Impact on Required Organizational Capabilities

Conse

nsu

s Pr

obab

ility

What new/existing market opportunities should we pursue? What makes these opportunities attractive? What markets should we divest/exit from? Who are the key customers we intend to target in these markets? What new customers are emerging? How can these customers be segmented? How do their needs differ?Who will be our attractive customer(s)? What will be the future environment facing the organisation's attractive customers?How do these customer define success (value) in working with our organisation?

What specific tangible/intangible outcomes are they expecting?What relationship experience are they expecting?

How will we create value for these customers? What are the critical underserved or overlooked problems, tasks, or aspirations of these customers we intend to address?

What innovation portfolio should we build to deliver these customer outcomes and experiences? What mix of sustaining and reframing value-creation models will we offer?What specific sustaining solutions and experiences will we offer?What specific reframing solutions and experiences will we offer?What is our intended level of differentiation/uniqueness?

Who will be our competitors? Who are we being benchmarked against?What future capabilities will providers need in order to become and remain a leader?Which competitor/provider (either direct, indirect; current or emerging) is currently best prepared to meet our customer's emerging requirements?What will our unfair advantage be? What skills/assets will make us unique?Where will our revenue and profit margins come from? How can we diversify revenue streams?How well will our organization perform in this future, based upon its current capabilities?What mix of partnerships & alliances will we need in order to remain effective?

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Anterasian & Philips"Discontinuities"

(Marketing Science Institute)

The firms with the highest profits were those with the management skills necessary to

redefine strategy and reconfigure the resources and skills of the organization to fit new market requirements caused by market

discontinuities and shocks.

MaintainingOrganisational Resilience

Building Strategic Innovation Capability

Articulating the Business Assumptions

Traditional Emerging

Niche drugsSmall moleculesCombination therapiesImmunotherapies

Small-scale, rapid, "experimental" trials Data winsAgility mattersPayer is primary stakeholder

Strategic thinking & collaboration mattersCompetitors are other bios, pharmas and non-pharmas

Blockbuster drugsLarge moleculesSingle agents Targeted modulators, inhibitors, inducersLarge-scale, rigorous clinical trialsDrugs winProcess/safety mattersRegulator is primary stakeholderDomain expertise matters

Competitors are other pharmas & bio-techs

An Example

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Time

Val

ue

to C

ust

om

er

T0

Vr

Vs

REFR

AMIN

G

(Cre

atin

g va

lue i

n

prev

iously

unr

ecog

nize

d

or u

natta

inab

le way

s)

SUSTAINING

(Incremental, continuous

improvement of what

currently exists)

Understanding the Innovation Spectrum

Building Strategic Innovation Capability

Time

Val

ue

to C

ust

om

er

T0

KodakBlackberry (secure e-mail)Blockbuster Video Traditional TelcoTraditional HotelTraditional PharmaceuticalVenture CapitalTaxisATM'sTraditional Currency ExchangeUniversities/Higher Ed.Bricks & Mortar RetailingGM, Ford, BMW, etc.NestleTraveling CircusPermanent Work ForceMicrosoft, Intel, HP

French Wine

Digital Imaging Apple (infinite apps)Netflix/Video StreamingSKYPE/VoIP/FacetimeAirbnb, Scandic2Go, SnoozeboxPersonalized Health 2.0Kickstarter, OurCrowdUber, LyftDigital WalletsBitcoin/Block ChainKnowledge as a CommodityAmazon, Alibaba, RakutenGoogle, TeslaStarbucksCirque du SoleilUpwork, Task RabbitGoogle, Apple, Facebook, AmazonNew World Wine Producers

Sustaining Reframing

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Building Strategic Innovation Capability

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Building Strategic Innovation Capability

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Building Strategic Innovation Capability

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Building Strategic Innovation Capability

Time

Val

ue

to C

ust

om

er

T0

KodakBlackberry (secure e-mail)Blockbuster Video Traditional TelcoTraditional HotelTraditional PharmaceuticalVenture CapitalTaxisATM'sTraditional Currency ExchangeUniversities/Higher Ed.Bricks & Mortar RetailingGM, Ford, BMW, etc.NestleTraveling CircusPermanent Work ForceMicrosoft, Intel, HP

French Wine

Digital Imaging Apple (infinite apps)Netflix/Video StreamingSKYPE/VoIP/FacetimeAirbnb, Scandic2Go, SnoozeboxPersonalized Health 2.0Kickstarter, OurCrowdUber, LyftDigital WalletsBitcoin/Block ChainKnowledge as a CommodityAmazon, Alibaba, RakutenGoogle, TeslaStarbucksCirque du SoleilUpwork, Task RabbitGoogle, Apple, Facebook, AmazonNew World Wine Producers

Sustaining Reframing

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Time

Val

ue

to C

ust

om

er

T0

Vr

Vs

REFR

AMIN

G

(Cre

atin

g va

lue i

n

prev

iously

unr

ecog

nize

d

or u

natta

inab

le way

s)

SUSTAINING

(Incremental, continuous

improvement of what

currently exists)

Understanding the Innovation Spectrum

Building Strategic Innovation Capability

Lesson No. 1

No industry is immune. Customer value can be reframed at any time in

in any industry.

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Lesson No. 2

All reframing opportunities are enabled because of an overlooked or underserved

customer need or aspiration.

Building Strategic Innovation Capability

Lesson No. 3

Everything has risk, including the strategy of not

reframing, which can ultimately lead to market

irrelevance.

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Lesson No. 4

Innovation risk can be mitigated by building a

balanced innovation portfolio.

Building Strategic Innovation Capability

Core Differentiator

(Sets Company Apart;: Builds Unique Class Reputation; Builds Attitudinal Loyalty)

Sustaining(Existing Value-

Creation Models)

Reframing(New Value-Creation

Models)

Contributor(Maintains Position

But Does Not Distinguish the Organisation)

Unique Class

Best-In- Class

Parity

Size of Circle:Total resources

committed to each innovation initiative

The Innovation Portfolio as the Driver of Organisational Success

Strategic Impact(Perceived Uniqueness)

Strategic Relatedness(Perceived Relevance)

products/servicessupport programscustomer experience initiativesreputation initiativesbusiness models

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Lesson No. 5

The innovation portfolio drives customer loyalty, market leadership and

economic returns.

Building Strategic Innovation Capability

Why innovate? What are we optimizing to? Internal efficiency or market effectiveness? How does this choice impact the innovation strategy?What are the drivers of the enterprise's ultimate success: - growth, profitability, leadership reputation, human capital attraction? How does innovation impact these drivers? Where should management attention be focused to get ahead of the performance curve? How do we find the next growth curve? What new business models will unleash our next wave of growth and profitability? How does innovation impact customer loyalty? What type of innovation portfolio is required to build true customer franchise? How does this loyalty translate into tangible benefit to the organization?Should innovation be just another function in the business, or should it be embedded as the core of the operating model?

Linking Innovation to Business Performance

How will our investments into innovation drive

growth, profitability and leadership reputation?

How do we link innovation to tangible business outcomes?

The Strategic Innovation Capability Model

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Linking Innovation to Business Performance

Result

Level 1 Lead

Indicator

Level 2 Lead

Indicator

Level 3 Lead

Indicator

Level 4 Lead

Indicator

Superior Perceived Customer Value

"FunctionalQuality" Offerings(How Is It Delivered?)

"TechnicalQuality" Offerings

(What is Offered?)

Internal Culture, Competencies, Operating

Model, Organization Design, Measurement & Rewards

Customer Loyalty & Advocay

Firm's Internal Value Delivery System

(Capability Portfolio)

Customer Outcomes & Experience

(Opportunity Portfolio)

Customer Commitment(Franchise)

Organisational Success

Leadership Reputation, Growth, Economic Viability,

Human Capital

Firm's Offerings & Solutions

(Innovation Portfolio)

Linking Innovation to Business Performance

Lagged Business Result

Level 1 Lead

Indicator

Level 2 Lead

Indicator

Level 3 Lead

Indicator

Level 4 Lead

Indicator

Superior Perceived Customer Value

Culture, Structure, Operating Model, Competencies, Msmt

& Rewards, etc.

Customer Loyalty &/or Market Share

Internal Value Delivery System

(Capability Portfolio)

Customer Success

(Opportunity Portfolio)

Customer Commitment(Franchise)

Organisational Success

Firm's Offerings & Solutions(Innovation Portfolio)

Leadership Reputation, Growth, Profitability

Mkt Share: R2 = .09

Cust. Loyalty: R2 = .64 to .84

Profitability Correlations

"TechnicalQuality" Offerings(What is Delivered?)

"FunctionalQuality" Offerings(How Is It Delivered?)

CV = RB/RP

Outcomes + Experience

Pain Removed + "Gain" Created

ProductsSupportRel. MgmtBrand/ImageBusiness Model

Building Strategic Innovation Capability

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Linking Innovation to Business Performance

Result

Level 2 Lead

Indicator

Level 3 Lead

Indicator

Level 4 Lead

Indicator

Firm's Internal Value Delivery System

(Capability Portfolio)

Customer Outcomes & Experience

(Opportunity Portfolio)

Organisational Success

Leadership Reputation, Growth, Economic Viability,

Human Capital

Firm's Offerings & Solutions

(Innovation Portfolio)

Level 1 Lead

Indicator

Customer Loyalty & Advocay

Customer Commitment(Franchise)

Superior Perceived Customer Value

"FunctionalQuality" Offerings(How Is It Delivered?)

"TechnicalQuality" Offerings

(What is Offered?)

Internal Culture, Competencies, Operating

Model, Organization Design, Measurement & Rewards

Building Strategic Innovation Capability

Supporter

AdvocatePartner

Customer

Client

Attitudinal Loyalty

Behavioral Loyalty

On-

goin

g Rel

atio

nshi

pSc

ope

of

Rela

tion

ship

Will

ing

to F

und

or

Pay

Prem

ium

Yes

Yes

Broad

Narr- ow

Strong Positive,

Emotively Active

Negative, Nuetral, or Mild Positive

Yes

No

No

Yes

Yes

No

Attitudinal Vs Behavioral Loyalty

Incr

easin

g Co

mm

itmen

t

Att

itud

eTo

war

ds P

rovi

der

Con

side

rs/D

esires

Oth

er S

ourc

es

Proa

ctiv

ely

Supp

orts

Pro

vide

r

Understanding Customer Commitment

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Driving Customer Commitment- Why Bother? -

Supporter

AdvocatePartner

Prospect

Customer

Client

Reinartz & Kumar (HBR, July 2002)

High-tech B2B customers high on attitudinal loyalty are:

44% more likely toengage in active WOM;26% more likely to engage in passive WOM;50% more profitable;

than customers high on behavioral loyalty alone

The Empirical Evidence

Building Strategic Innovation Capability

Driving Customer Commitment- Why Bother? -

Supporter

AdvocatePartner

Prospect

Customer

Client

Reinartz & Kumar (HBR, July 2002)

The Empirical Evidence

B2C customers high on attitudinal loyalty are:

54% more likely to engage in active WOM;33% more likely to engage in passive WOM;120% more profitable;

than customers high on behavioral loyalty alone

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Core Differentiator

(Sets Company Apart;: Builds Unique

Class Reputation; Builds Attitudinal

Loyalty)

Sustaining(Existing Value-

Creation Models)

Reframing(New Value-Creation

Models)

Contributor(Maintains Position

But Does Not Distinguish the Organisation)

Unique Class

Best-In- Class

Parity

Size of Circle:Total resources

committed to each innovation initiative

So What is the Right Portfolio to Drive Attitudinal Loyalty?

Strategic Impact(Perceived Uniqueness)

Strategic Relatedness(Perceived Relevance)

Building Strategic Innovation Capability

Differentiating(Sets Organization

Apart: Builds Unique Class Reputation, Builds Attitudinal

Loyalty)

Sustaining(Existing Value-

Creation Models)

Reframing(New Value-

Creation Models)

Parity

Best-In-Class

Unique Class

Contributing(Maintains Position

But Does Not Distinguish the Organization)

Customer Franchise

Behavioral Loyalty

The Innovation Portfolio as the Driver of Organisational Success

Strategic Relatedness(Perceived Relevance)

Strategic Impact(Perceived Uniqueness)

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

A Poorly Balanced Portfolio- What causes it to be out of balance? -

Building Strategic Innovation Capability

The Innovation Portfolio as the Driver of Organisational Success

Sustaining(Existing Value- Creation Model)

Reframing(New Value-

Creation Model)

Parity

Best-In- Class

Unique ClassHardware

iTunes,AppStoreRetail

Experience

Brand

Differentiating

Contributing

Strategic Relatedness

Strategic Impact

An Example

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

The Innovation Portfolio as the Driver of Organisational Success

Customer Franchise

Strategic Relatedness

Differentiating

Sustaining(Existing Value-

Creation Models)

Reframing(New Value-Creation

Models)

Strategic Impact

Parity

Best-In-Class

Unique Class

Contributing

Differentiation Advantage

Pionee

ring A

dva

nta

ge

Building Strategic Innovation Capability

The Innovation Portfolio:The Key Driver of Market Performance

Top 5 "Fortune 500"Annual Returns to Shareholders, 2004-2014

Strategic Relatedness

Core Differentiator

(Sets Company Apart: Builds Unique Class Reputation; Builds Attitudinal Loyalty)

Sustaining(Existing Value-

Creation Models)

Reframing(New Value-Creation

Models)

Contributor(Maintains Position

But Does Not Distinguish the Organisation)

Strategic Impact Unique Class

Best-In- Class

Parity

#1 Priceline#2 Netflix#3 Apple#4 Celgene#5 Salesforce.com

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.

Building Strategic Innovation Capability

Lesson No. 6

Building a balanced innovation portfolio requires

the ability to manage two parallel but radically different

innovation cultures and governance models.

Building Strategic Innovation Capability

...to be continued in San Francisco

Thank You

Copyright 2016. Dr. Peter C. Wilton. PROPRIETARY & CONFIDENTIAL. Not to be used, distributed, or reproduced without express written permission.