This week I was a speaker at the Society of Continuous Process Development (SCPD) chapter in Minneapolis hosted at the 3M event center.
Many speakers shared internal experiences trying to launch a innovation team. The event was well tended and I was able to sponsor 4 graduate students from the UMN. SCPD was started by the government for defense contracts but Steve Jobs brought it to apple and now the community is spreading.
My topic was focused on real world case studies of corporate organizations that had built internal innovation units and the learning from each attempt:
Case Study 1: Corporate Venture
This was a detailed study of a fortune 100 that started a new venture group as a skunk works team reporting directly to the board. Given board alignment, they pursued several new pilots that were building new markets. With luck and good timing, the first three attempts produced great results. The problem the organization ran into was that the success created both political and operational problems overall. Politically, senior LOB leaders resented the innovations and became obstacles in supporting them as those business grew and needed to rely on the enterprise operations. Attempts where made to try and integrate more people into the innovation process, but that stalled the progress due to the culture clash of people reporting to more than one boss via dotted line relationships. Finally, the forth pilot stalled, it produced fantastic market insights and needed to pivot, but with no past experience in pivoting it was viewed as a failure and everyone was fired because the innovation team couldn’t guarantee success. While originally a poster case of innovation, it demonstrated the dangers of not really changing the overall corporate culture while shifting strategic direction into new markets.
Case Study 2: Start-up Venture
This study looked at a start-up that build a business platform between adjacent industries which became a massive catalyst for business change and growth across those industries. It was a success story of both inter sector integration and eventual big data capabilities across the industry. Initially the start up was viewed as a neutral party that was acting on everyone’s behalf. In the true spirit of co-opitiion they formed many strategic partnerships and joint investments that propelled the start-ups growth. As it became clear that this truly was a major innovation in the market, one of the largest partners acquired the start-up. This proved to be disastrous for everyone. The start-up team was assimilated into the large corporate structure and the beurocracy stalled the productivity. The network of partnerships collapsed because neutrality had been lost. A critical lesson for big companies to learn as their markets are disrupted and evolve. Market growth is sometimes best shared vs. controlled and limited.
Case Study 3: Independent Venture
This was a case study in an individual with a new consumer electronics product. They had spent years trying to get investors to off set the cost of partnering with US manufactures. The proposed costs where in the millions to design and manufacture, plus most of the IP would have to be given to the companies partnering with. Pivoting on partner strategy vs. product, he began to explore global internet based business bidding sites. Within a few weeks he had the circuit boards designed in Australia, manufacturing occurring in China, brand and marketing out of Argentina, assembly and shipping in the USA and retailing on online commerce sites. The cost was around $10K in comparison and the timeframe was months vs. years to be in market. The business is happily growing. Another good lesson for major corporations to see the power of the global service economy and ease of networking now possible.
I also looked at the Innovation Landscape as a series of 6 major factors that should be considered while designing the business model canvas for a new initiative:
Take aways that resonated across the speakers:
– Need to engage the board to support the innovation initiative. Bring them into the process and leverage their experiences.
– The Innovation team needs to support the LOB teams. Make the LOBs successful and be seen as a resource to them.
– Internally, the innovation team needs to run skunk works projects to prototype ideas to have more insights to bring to the business, there is a great art to running stealth during proof of concepts phases before making thing visible for scrutiny.
– The innovation team needs to staffed appropriately with diverse roles. Everyone needs time to learn and stay plugged into trends.
– Have virtual team members from the LOBs rotate in and out to become more apart of the culture and build advocates that know the process.
– Create home teams and away teams. Away teams are out interning customers and in direct contact with the home team that is rapidly incorporating feedback into the ongoing pitch. Rotate so people meet the customers and work internally.
– Some companies are using 3D printing in product design, they are making prototypes rapidly and testing with consumers every day. They make consumer products and take them directly into the home to pilot them for real world feedback.
– Failure is a critical component of exploration. Success should be measured by the number of pivots and the insights learned about the market, not by artificial metrics.
– Collaboration tools are key, they must be used across the organization
– Most companies have an innovation portfolio that is more enhancements than disruptive, much less the few who are actually creating new markets. Need to have good portfolio management that is governed by the board and c-suite to have the backing and mandate to take risk.
See more event images in the gallery