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Innovation for
CFOs and CEOs
1
What is in this
presentation …
1. A brief description of the course and course objectives
2. An outline for the first 3 ho...
Bryan Cassady
• 11 Start-ups in 6 countries (8 winners, 1
loser, 2 unknown)
• Dual MBA: Finance / Strategy (Cornell) +
Mar...
The market for Innovation courses in Executive
education is tough and crowded
Key words:
Focus ideas
Innovation
Intraprene...
TRUE Truly Simple
A new type of innovation management course for
existing customers
N
Narrative. Why it is
important (the ...
My recommendation (2)
Customers
Services
Strategy, Finance
Operations
Innovation
Courses
Current
Customers
New
Customers
I...
Why a course for CFOs
and COOs ?
Less than 4% of board members have experience in marketing or
innovation. I believe CFOs ...
A 3 day course
Before the course: Innovation assessment + results
Day 1 Introduction + Alignment
Day 2 Build Ideas + Commu...
Course participants will get an invitation to participate in
an Innovation readiness assessment before the course.
This is...
" Finding Alpha … Innovation management to drive exceptional business returns"
"Innovation for CFO s and CO O s
.. Making ...
How this course will be different
• Restricted to CFOs and COOs (no CEOs or Marketing people)
• An innovation readiness as...
Disclaimer
A work in progress…
Visuals by a failed Microsoft designer
…
Please Interrupt
Ask questions
Disagree
Innovation for
CFOs and CEOs
14
Why a course for CFOs
and COOs ?
Less than 4% of board members have experience in marketing or
innovation. I believe CFOs ...
Sink or Swim
Drop off people than can’t swim in the
middle of the lake …
• Offer money
• Describe glory at the end
• Expla...
Behaviour = MAP
If you want people to swim they need 3 things
1. Motivation
2. Prompt and
3. Most importantly, ability
For encourage
most behaviours
Prompts First
Ability Second
MotivationThird
Source video: Designing For Habit Change - BJ F...
With 94% of companies
Unhappy with their
innovation programs
They are probably here
The goal is to get
here
The solution will be
Strategy
1. Simplifying
2. Motivating
Culture
3. Build the right culture
Systems
4. Most importantly ...
Course Overview
3 deliverables
1. A new / better innovation
strategy for your business
2. You will know what to do
next to...
Innovation
is big business
On Amazon there are
76.579 books on
innovation!
On Linkedin 1.1 million
innovation consultants
...
What is the "guru story
1. “We’re all going to die”
2. “the bureaucracy is killing us” – so we have to
go outside the norm...
Gurus sell you recipes
to sell you ingredients
In this course you will “learn to cook”,
so you can choose which recipe fit...
Can innovation be
taught ?
Probably not, but the principles that make it work can be…
Let’s get started …
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strate...
Innovation
Meaningful Unique
Value Creation
• If consumers are not willing to
pay more, you are not
meaningfully unique
Va...
New Technology
New products
New customers
Is this innovation ?
Sales up 30%
Price up 250%
Wastage down 40%
+ =
Source: video: Three Steps for Creating an Innovative...
6 Basic types of Innovation
New
Existing
Customers
Services
NewExisting
4. Adjacent Innovation
(Marketing focus)
4. Adjace...
New / New is a risky strategy
New
Existing
Customers
Services
NewExisting
15%
15%
2%
Weak Core
25%
25%
5%
Strong Core
50%
...
A 10 year study by Bain
studying variance of corporate
results
78% in industry
22% choice of industry
Source: Repeatabilit...
In my view, innovation is just another word for ‘giving up’. It’s
saying that things are so bad that it’s easier to get in...
A balanced portfolio
85 % core
15% leap
Source: Driving Eureka
4 Value propositions
More $
Less $
More valueLess value
Int’l SIM
CardsRyan Air
IKEA NewTide
The Perils of More / More
“ ‘Good management’ was the most
powerful reason [leading firms]
failed to stay atop their indus...
One type of innovation is
not better than another
Question: Last successful
new product from Apple
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strategy
6. Culture
7. Sys...
In Fortune 500 companies…
New products (< 5 year)
• 40% of revenues
• And 50% of profits
Source: MIT 2015
Without innovation we all become average
“40 years for 1,000 U.S.
companies. No long-term
survivors managed to
outperform ...
The cycle of life
Source: Driving Eureka
Innovation can help you re-start
Source: Driving Eureka
Why innovation
• Only insurance against irrelevance
• Only protection against commoditization
• Only hope of long-term cus...
“It is not the strongest of the
species that survives, nor the
most intelligent, but the one
most responsive to change.”
—...
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strategy
6. Culture
7. Sys...
Innovations fail too often…
When they succeed they are usually
late, overhyped and seldom deliver on
the original promises
companies value
innovation
are classified as
innovative by their
peers
Source: PWC Study
of their customers
would agree
of companies think
they had a major
innovation in the
last 6 months.
Source: PWC Study
success
opportunity
entropy
Lack of
focus
Lower
results
Source : Book Repeatability
Boom to doom
Need
Growth
Innovation
is...
Common Solutions proven not to work
Rewards / Controls
Big Idea Hunt
Skunk works
Buy a culture
A better solution is to build expertise over
time
Crawl, Walk, Run
Change happens
slowly, but then it
happens all at one
S...
The Beta of an Innovation Strategy
What is not shown…
% ROI Weighted
Winning 20% 45% 9%
Surviving 60% 9% 5%
Dying 20% 1% 0...
Innovate or Die
Should also include a warning
“Innovate wrong and die
faster”
54
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strategy
6. Culture
7. Sys...
Top Reasons CFOs /COOs not
involved
1. A desire to get out of the way
2. Not creative
3. Lack of expertise and confidence
...
Ideas are not the drivers of Innovation
Success
The Story of Innovation Engineering
“America’s #1 Idea Guru” –
A&E Top 10 !
“America’s #1 New Product Idea
Man” – Inc. Magazine !
In his words..
He sold spark plugs
to Industry
Fees for 2-3 day
workshops
$100,000 – $ 200,000
then the sparks worked
less...
They analysed a mountain of data
PEOPLE Data: innovation benchmarking data on
over 100,000 managers.
PROCESS Data: As of t...
16 %
ideas
84 %
systems
They identified the share of success due to
ideas and systems
Based on 4 years of research with over
400 companies
There are companies that succeed and
companies that fail. The biggest...
Constant improvement =
9th wonder of the world ?
Compound interest
is the eighth
wonder of the
world.
Albert Einstein
1 ye...
Continuous improvement is not a
conservative strategy
It is about action every day, regular
failure and an unwillingness t...
If innovation is about
systems of ongoing
improvement
Why shouldn’t you be
leading this?
You’ve got a choice…
Work in a company with
an expiry date
or do something
My challenge to you…
Get mad. Start Doing
something about it.
Now.
69
C O*
*Chief ! Officer
The right role
for a C!O
1. Strategy – Organizational alignment
before execution
2. Culture – The best next step now
3. Sy...
A first question...
Are you really serious about
Innovation?
• Have your front-line people been trained in
innovation?
• H...
CLASS
BREAK
(And discussion)
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strategy
6. Culture
7. Sys...
Basics of Strategy
• What, Where, How,
Capabilities, Systems
• Good strategy is a
waterfall with each stage
leading logica...
“Companies have defined so
much ‘best practice’ that they
are now more or less
identical.”
—Jesper Kunde, Unique Now ... o...
A traditional Innovation Strategy
What
• Big ideas revolutionizing our
business
Where • New, new and maybe adjacencies
How...
A good innovation is linked to
company strategy
First company strategy
Then Innovation strategy
Company
Level
Innovation
S...
An improved (but still generic) strategy
What
• Value Capture=
• Value to customer * % value capture
Where
• Close to the ...
The right role
for a C!O
1. Company objectives
linked to Innovation
objectives
2. The cascade of
strategic choices
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strategy
6. Culture
7. Sys...
The right culture is just as
important
“Culture eats strategy for
lunch”
81
Cargo Cult SciencePlanes with materials
How to get some
A 4 year study with over 400 companies
78% of variance of
Innovation
Innovation linked
to 38% of the
variance in firm
perf...
Culture and capabilities grow over time
The Basics
Strategy
Hunger
Philosophy
Learning Orientation *
Operations
Speed
Proa...
An innovation culture is NOT soft
Everyone Wants
• Tolerance for failure
• Willingness to Experiment
• Collaborative
• Fre...
“In the end, management
doesn’t change culture.
Management invites
the workforce itself to change
the culture.”
—Lou Gerst...
The right role
for a C!O
1. Identify where you
are now
2. Encourage the best
next step in building
an innovative culture
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strategy
6. Culture
7. Sys...
Systems are the solution…
Every system is perfectly designed to
get the results it gets. W. Edwards
Deming
What is a system ?
2 or more parts working together to achieve a
common goal
A way of doing things
A good system = product...
If you are not providing the tools you
can’t blame the workers
• People want to innovate
• Common cause versus special cau...
Planning / Execution is messed up
Timings
• 10 months planning with the best people
• 6 months to get it done
Working toge...
Why systems first ?
93
Systems
StrategyCulture
1.Ability = biggest barrier
2.Virtuous cycle
3.Easier than culture
4.You ha...
A simple idea…
Many forms
The Deming Cycle
1. Lean Start up
2. Design Thinking
3. Agile
4. The Innovators Method
5. Innova...
My New Book
An evidence based solution to
build bigger ideas, faster while
reducing risks
• +/- 1200 Articles, 40 books
• ...
Cycles: The core of successful
innovation
Cycle 1
Cycle 2
Cycle 3
Cycle 4
Cycle 5
Align/Ask
Build
Communicate
Check
System...
1. What is innovation
2. Why important
3. Innovation in Practice
4. There is a JTBD for CFOs
5. Strategy
6. Culture
7. Sys...
Overview
Case Studies to apply knowledge
Work in the evening to apply learnings to your company
Day 1 Day 2 Day 3
SNARCAlignment
Alignment Facts
• 90% of Leaders think a good strategy has an
impact on business success, but barely 25% of
them have a st...
A very important fact
Autonomy is negatively correlated with innovation results
In most companies, there is not clarity
on...
You’ll learn to make an innovation
mission as simple as this one
Tetrapak
We are looking for markets of size X,
where the ...
103
Develop a
solution
Find a need Find a market
Ideas
First
Success
Rate*
5-10%
Why…
Needs first, not ideas first !
Find ...
A problem well stated is a
problem half-solved.
Charles Kettering
Building Ideas
Build Facts
68% of the variance of quality ideas can be explained by this formula
Uncreative people are usually better at ...
What you’ll learn
1. Effectuation (looking for ideas at home with
the resources you have)
2. Stimulus Mining
3. How to lev...
Communicate
Check
Communicate / check facts
• You can’t get feedback unless things are clear
• Our ideas are less good than we think they ar...
Adding clarity to communication
110
Depending on the
study…
80-90% of advertising
does not work…
Why ….
• Lack of a benefi...
Getting NPV calculations right
The Math of Innovation
Pretotyping … Fake it before making it
IBM speech to text example
You’ll also see pretotyping in action
Walhub
Top 20% performers kill 9
times more projects
before detailed design
starts
“Eliminate the walking
dead to save the living...
It is easy to kill bad ideas,
great companies kill good
ideas (early)
Steve Jobs
117
Systems
System Facts
• “Ideas start as a sparkling star. Then one by one the
sparkles and points are taken away until all you have...
6 Big concepts
1. A system versus a process
A system is
Parts working together to
create a shared objective
A process is
A way of doing t...
2. The Stockdale Paradox
Confront the most brutal facts
of your current reality,
whatever they might be.
But retain faith
#3 No problems =
No progress.
[Period.]
A focus on Death Threats
can increase speed by 60%
4.
Multi-tasking
Innovation
does not work
Source : Simplifying Innovation
5. Sequential =
speed and cash
Source : Simplifying Innovation
5 Step by step is the fastest solution
Make sure the right “it” before building “it”
True North
“Align”
“Build”
“Check /
c...
6. Cycles are not just the front end
OngoingCycles
Of continuous
Improvement
Source visual: Driving Eureka
An example of world class … (100 Days)
Objectives
Process
Alignment
A new business / business model in 12 weeks
A weekly l...
The ABCs is a not complete re-think
• It starts with more clear directions / decisions
• The use of tools, methods to buil...
The right role
for a C!O
Working towards Monday
Change only happens when change happens !
We’ve been taught Motivation  Habits
Resolve to start
St...
Don’t think how long
Think
how easy
how many
how better
What next …
Lunch then a lot of work
Innvovation for CEOs and CFOs (Draft)
A 3-day course that will deliver Work outside class
1/. Strategy, 2/. Cultural under...
Systems (And
Culture)
Friday
Morning
A learning organization
Profound knowledge
(business are systems)
Bright Spots and De...
Summary to discuss course ideas
* Front end and back end of innovation * Systems first approach * The specific focus shoul...
Innovation for CFOs and COOs (Course Ideas + Course introduction)
Innovation for CFOs and COOs (Course Ideas + Course introduction)
Innovation for CFOs and COOs (Course Ideas + Course introduction)
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Innovation for CFOs and COOs (Course Ideas + Course introduction)

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Ideas for an executive education course in Innovation for CFOs and CXOs.

Why an Innovation course for CFOs and COOs ?
Less than 4% of board members have experience in marketing or innovation. I believe CFOs and COOs would be best people to lead a systems driven approach to Innovation at the board level

What is in this presentation
1. A brief description of the course and course objectives
2. An outline for the first 3 hours of a 3 day course
3. The last slide is a summary of the course and how value can be captured

For clarity, notes have been added to several slides that would not be in the course slides.
Keywords
CFO, CXO, Innovation, Executive Education, Bryan Cassady, Deming, Agile, Design Thinking, Scrum, Innovation Engineering

Veröffentlicht in: Business
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Innovation for CFOs and COOs (Course Ideas + Course introduction)

  1. 1. Innovation for CFOs and CEOs 1
  2. 2. What is in this presentation … 1. A brief description of the course and course objectives 2. An outline for the first 3 hours of a 3 day course 3. The last slide is a summary of the course and how value can be captured For clarity, notes have been added to several slides that would not be in the course slides.
  3. 3. Bryan Cassady • 11 Start-ups in 6 countries (8 winners, 1 loser, 2 unknown) • Dual MBA: Finance / Strategy (Cornell) + Marketing (KU Leuven) • Adjunct Professor : KU Leuven , Solvay • As a consultant, hundreds of companies • Director Founder Institute/ The European Innovation academy • 4 years of research with over 400 companies on the drivers of Innovation success • New Book Cycles – 24 co-authors around the ABCs of Innovation 3 Beliefs 1. Anyone can innovate 2. Bad systems will beat good people over time 3. Good systems can make average people great Helping companies bring bigger ideas to market faster, while reducing risks
  4. 4. The market for Innovation courses in Executive education is tough and crowded Key words: Focus ideas Innovation Intrapreneurship Ideas to market Disruptive innovation Innovation management Leading innovation Culture Making Innovation Happen Growth through innovation Design Thinking Digital Customer Focus Leading Health Care A “winners” market . Winners winning more (Stanford, Berkeley, MIT) A trend toward industry / function specific cou Medical Innovation / Innovation for COOs
  5. 5. TRUE Truly Simple A new type of innovation management course for existing customers N Narrative. Why it is important (the story) If we offer the same courses as everyone else, we can’t win. O Objective 2 course ideas to test R Restrictions: We are not interested in Wild and wacky Courses without a basis in research T Tactical Constraints: Something that could be done in 3 days and on-line H Here is the place to start The strengths of our MBA program
  6. 6. My recommendation (2) Customers Services Strategy, Finance Operations Innovation Courses Current Customers New Customers Innovation for CFOs /COOs (2) A typical Innovation course (1) Strengthens core And lower risk (but more work)
  7. 7. Why a course for CFOs and COOs ? Less than 4% of board members have experience in marketing or innovation. I believe CFOs and COOs would be best people to lead a systems driven approach to Innovation at the board level
  8. 8. A 3 day course Before the course: Innovation assessment + results Day 1 Introduction + Alignment Day 2 Build Ideas + Communicate/ Check Day 3 Systems and Application With a multi-day case study or a “do not do” digital case study 3 Deliverables: 1. A better Innovation Strategy 2. What next to build a culture to support innovation 3. Why / how – A systems approach to innovation
  9. 9. Course participants will get an invitation to participate in an Innovation readiness assessment before the course. This is a sample report
  10. 10. " Finding Alpha … Innovation management to drive exceptional business returns" "Innovation for CFO s and CO O s .. Making Innovation predictable and profitable" Problem I want innovation to be more impactful, profitable and predictable. And I need something that will deliver results now Promise Tools, systems, methods to make innovation manageable Build bigger ideas while increasing speed up to 6X and reducing risks by 70% Proof Evidence based Built on a 4 year study with over 400 companies Supported and vetted by "hard-nosed" strategy and finance from the Booth School of Business. Payoff A step by step process to enable successful innovation by everyone,everywhere in your company In-depth trainings Company trainings On-line solutions
  11. 11. How this course will be different • Restricted to CFOs and COOs (no CEOs or Marketing people) • An innovation readiness assessment before the course and used in the course. • Most innovation courses provide new ideas, more complexity. This• course will help C!O’s take control of Innovation by doing • less and helping them fix things by working on systems first • A toolkit to accompany each part of the course • Working towards Monday (Using innovation to work smarter) • Under the radar message .. “Crawl, walk run” (100 day rule)
  12. 12. Disclaimer A work in progress… Visuals by a failed Microsoft designer …
  13. 13. Please Interrupt Ask questions Disagree
  14. 14. Innovation for CFOs and CEOs 14
  15. 15. Why a course for CFOs and COOs ? Less than 4% of board members have experience in marketing or innovation. I believe CFOs and COOs would be best people to lead a systems driven approach to Innovation at the board level
  16. 16. Sink or Swim Drop off people than can’t swim in the middle of the lake … • Offer money • Describe glory at the end • Explain technique: 2 stroke/ 1 breath, all you gotta do is copy them • Bring in a swimming consultant
  17. 17. Behaviour = MAP If you want people to swim they need 3 things 1. Motivation 2. Prompt and 3. Most importantly, ability
  18. 18. For encourage most behaviours Prompts First Ability Second MotivationThird Source video: Designing For Habit Change - BJ Fogg // Startup Elements
  19. 19. With 94% of companies Unhappy with their innovation programs They are probably here The goal is to get here
  20. 20. The solution will be Strategy 1. Simplifying 2. Motivating Culture 3. Build the right culture Systems 4. Most importantly make it easy --------------------- 5. And small wins 1 2 3 4 5
  21. 21. Course Overview 3 deliverables 1. A new / better innovation strategy for your business 2. You will know what to do next to build a culture of innovation in your company 3. Enough knowledge to start building an effective system for innovation Course Principles • Evidence based • Learning by doing • Toolkits to accompany each part of the course • Application of ideas, so you can start taking action next Monday 21
  22. 22. Innovation is big business On Amazon there are 76.579 books on innovation! On Linkedin 1.1 million innovation consultants A huge list of “best practices” (I found over 100)
  23. 23. What is the "guru story 1. “We’re all going to die” 2. “the bureaucracy is killing us” – so we have to go outside the normal organizational structure to get the right things done. 3. “There is hope for a brighter future” – as long as we all follow the guidelines and turn our organizations upside down. 4. “You have the power to make a change for the better” – even if you occupy the low rung on the corporate ladder. 5. “Follow me” 23
  24. 24. Gurus sell you recipes to sell you ingredients In this course you will “learn to cook”, so you can choose which recipe fits your company, select your ingredients and most importantly, still be able to cook when you’re missing ingredients
  25. 25. Can innovation be taught ? Probably not, but the principles that make it work can be…
  26. 26. Let’s get started … 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  27. 27. Innovation Meaningful Unique Value Creation • If consumers are not willing to pay more, you are not meaningfully unique Value Capture • If you are not earning more you are not innovating Innovation = Value Creation * Value Capture
  28. 28. New Technology New products New customers
  29. 29. Is this innovation ? Sales up 30% Price up 250% Wastage down 40% + = Source: video: Three Steps for Creating an Innovative Culture (Gary Pisano)
  30. 30. 6 Basic types of Innovation New Existing Customers Services NewExisting 4. Adjacent Innovation (Marketing focus) 4. Adjacent Innovation (Product Focus) 5.Transformational Innovation 6. Disruptive Innovation 6. Disruptive Innovation 6. Disruptive Innovation 2. Business Model 3. Process 1. Sustaining Innovation
  31. 31. New / New is a risky strategy New Existing Customers Services NewExisting 15% 15% 2% Weak Core 25% 25% 5% Strong Core 50% 50% 20% Strong Core + Systems (e.g. P&G) Source: Book Repeatability
  32. 32. A 10 year study by Bain studying variance of corporate results 78% in industry 22% choice of industry Source: Repeatability, Chris Zook
  33. 33. In my view, innovation is just another word for ‘giving up’. It’s saying that things are so bad that it’s easier to get into an entirely different line of business than to deal with our problems. And this whole ‘innovation culture’ is just the latest in a long line of business fads. An entire generation of managers and executives has now forgotten what it really takes to create organic growth. Sergio Zyman Ex CMO Coca cola
  34. 34. A balanced portfolio 85 % core 15% leap Source: Driving Eureka
  35. 35. 4 Value propositions More $ Less $ More valueLess value Int’l SIM CardsRyan Air IKEA NewTide
  36. 36. The Perils of More / More “ ‘Good management’ was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted…. “ —Clayton Christensen, The Innovator’s Dilemma
  37. 37. One type of innovation is not better than another Question: Last successful new product from Apple
  38. 38. 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  39. 39. In Fortune 500 companies… New products (< 5 year) • 40% of revenues • And 50% of profits Source: MIT 2015
  40. 40. Without innovation we all become average “40 years for 1,000 U.S. companies. No long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.” —The Financial Times A 10 year Harvard study ROI of 692 companies First 5 years Next 5 years Top 20% 39% 21% Bottom 20% 3% 17%
  41. 41. The cycle of life Source: Driving Eureka
  42. 42. Innovation can help you re-start Source: Driving Eureka
  43. 43. Why innovation • Only insurance against irrelevance • Only protection against commoditization • Only hope of long-term customer loyalty • The only real hope of long-term competitive advantage Arguably it is everything It is ONE Thing you can do (if you do it well) that will make everything else easier or unnecessary
  44. 44. “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” —Charles Darwin
  45. 45. 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  46. 46. Innovations fail too often… When they succeed they are usually late, overhyped and seldom deliver on the original promises
  47. 47. companies value innovation are classified as innovative by their peers Source: PWC Study
  48. 48. of their customers would agree of companies think they had a major innovation in the last 6 months. Source: PWC Study
  49. 49. success opportunity entropy Lack of focus Lower results Source : Book Repeatability Boom to doom Need Growth Innovation is the answer ! Fads, acquisition Failures Source : Book How the mighty Fall The doom cycle
  50. 50. Common Solutions proven not to work Rewards / Controls Big Idea Hunt Skunk works Buy a culture
  51. 51. A better solution is to build expertise over time Crawl, Walk, Run Change happens slowly, but then it happens all at one Source: Good to Great
  52. 52. The Beta of an Innovation Strategy What is not shown… % ROI Weighted Winning 20% 45% 9% Surviving 60% 9% 5% Dying 20% 1% 0% Weighted Result 14.4 % The Innovation median return is probably lower And this ignores the survivor bias
  53. 53. Innovate or Die Should also include a warning “Innovate wrong and die faster” 54
  54. 54. 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  55. 55. Top Reasons CFOs /COOs not involved 1. A desire to get out of the way 2. Not creative 3. Lack of expertise and confidence At the core… a misconception Innovation is about ideas
  56. 56. Ideas are not the drivers of Innovation Success The Story of Innovation Engineering
  57. 57. “America’s #1 Idea Guru” – A&E Top 10 ! “America’s #1 New Product Idea Man” – Inc. Magazine !
  58. 58. In his words.. He sold spark plugs to Industry Fees for 2-3 day workshops $100,000 – $ 200,000 then the sparks worked less and less
  59. 59. They analysed a mountain of data PEOPLE Data: innovation benchmarking data on over 100,000 managers. PROCESS Data: As of this writing we have measured over 6,000 teams during a day of brainstorming. IDEA Data: market research on over 26,000 innovations.
  60. 60. 16 % ideas 84 % systems They identified the share of success due to ideas and systems
  61. 61. Based on 4 years of research with over 400 companies There are companies that succeed and companies that fail. The biggest difference between winners and losers is smart winners make good, even mediocre, ideas great over time. Cycles success drives all types of innovation My research Value Time Start Learning Cycles No Changes Bad Cycles Smart Winners Lucky Winners Losers Losers
  62. 62. Constant improvement = 9th wonder of the world ? Compound interest is the eighth wonder of the world. Albert Einstein 1 year 2 Year 5 years 168% 281% 1329% 1% better per week
  63. 63. Continuous improvement is not a conservative strategy It is about action every day, regular failure and an unwillingness to accept there is any product, or process that cannot be further improved
  64. 64. If innovation is about systems of ongoing improvement Why shouldn’t you be leading this?
  65. 65. You’ve got a choice… Work in a company with an expiry date or do something
  66. 66. My challenge to you… Get mad. Start Doing something about it. Now.
  67. 67. 69 C O* *Chief ! Officer
  68. 68. The right role for a C!O 1. Strategy – Organizational alignment before execution 2. Culture – The best next step now 3. Systems – to deliver more than the Fuzzy front end
  69. 69. A first question... Are you really serious about Innovation? • Have your front-line people been trained in innovation? • How hard would it be for them to get $1000 to test a new idea? • What are the metrics for innovation success? • Do you have a documented Innovation system / process (or even a little “how to guide”)? 71
  70. 70. CLASS BREAK (And discussion)
  71. 71. 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  72. 72. Basics of Strategy • What, Where, How, Capabilities, Systems • Good strategy is a waterfall with each stage leading logically to the next" 74 Source : Playing toWin
  73. 73. “Companies have defined so much ‘best practice’ that they are now more or less identical.” —Jesper Kunde, Unique Now ... or Never
  74. 74. A traditional Innovation Strategy What • Big ideas revolutionizing our business Where • New, new and maybe adjacencies How • Big Bangs, Big changes, Big plans. Rewards / Controls, Big Idea Hunts, Skunk works, Buy a culture , Be a fast follower Capabilities • Great people, building great ideas Systems • How to build, select and invest in big ideas Hit or Miss 94 % unhappy with their innovation results
  75. 75. A good innovation is linked to company strategy First company strategy Then Innovation strategy Company Level Innovation Strategy Division Strategy
  76. 76. An improved (but still generic) strategy What • Value Capture= • Value to customer * % value capture Where • Close to the core renovation and strategic adjacencies Focused on these objectives How • Under the radar (* 100 day rule) / Crawl, walk, run • Systems Driven/ Building a culture and discipline of innovation Capabilities • Clear leadership, a learning focus, tools to support AND building a culture Systems • ABCs / Learning/ Innovation is everyone's job Bigger on strategy ideas, 3 X faster, 70% less risk
  77. 77. The right role for a C!O 1. Company objectives linked to Innovation objectives 2. The cascade of strategic choices
  78. 78. 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  79. 79. The right culture is just as important “Culture eats strategy for lunch” 81
  80. 80. Cargo Cult SciencePlanes with materials How to get some
  81. 81. A 4 year study with over 400 companies 78% of variance of Innovation Innovation linked to 38% of the variance in firm performance Sustaining Innovation Firm Performance Attitudes Processes Learning Strategic Alignment Breakthrough Innovation
  82. 82. Culture and capabilities grow over time The Basics Strategy Hunger Philosophy Learning Orientation * Operations Speed Proactivity General systems Customer focus Entrepreneurial Orient. Risk Taking Ecosystem Management Structure Creativity Room to grow Sustaining Innov. Breakthrough Innov. Want it Do it Not scared to do more
  83. 83. An innovation culture is NOT soft Everyone Wants • Tolerance for failure • Willingness to Experiment • Collaborative • Freedom to speak up • Flat The reality • Intolerance for incompetence • Demand disciplined action • Individual accountability • Brutal Candor • Strong Leadership 85Source: video:Three Steps for Creating an Innovative Culture (Gary Pisano)
  84. 84. “In the end, management doesn’t change culture. Management invites the workforce itself to change the culture.” —Lou Gerstner
  85. 85. The right role for a C!O 1. Identify where you are now 2. Encourage the best next step in building an innovative culture
  86. 86. 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  87. 87. Systems are the solution… Every system is perfectly designed to get the results it gets. W. Edwards Deming
  88. 88. What is a system ? 2 or more parts working together to achieve a common goal A way of doing things A good system = product of parts 90
  89. 89. If you are not providing the tools you can’t blame the workers • People want to innovate • Common cause versus special cause In operations … "94% of failures are due to the SYSTEM 6% are due to the WORKER” 91
  90. 90. Planning / Execution is messed up Timings • 10 months planning with the best people • 6 months to get it done Working together Do we work together to solve issues or blame other departments 92
  91. 91. Why systems first ? 93 Systems StrategyCulture 1.Ability = biggest barrier 2.Virtuous cycle 3.Easier than culture 4.You have probably already worked on motivation
  92. 92. A simple idea… Many forms The Deming Cycle 1. Lean Start up 2. Design Thinking 3. Agile 4. The Innovators Method 5. Innovation Engineering Missing alignment: 1,2,3,4 Missing “how to’s” : 1,2,3,4 Complexity 5
  93. 93. My New Book An evidence based solution to build bigger ideas, faster while reducing risks • +/- 1200 Articles, 40 books • Research with 400 companies • 28 co-authors Alignment = core Process, Persistence, patience Crawl, walk, run A book, a toolkit , a course and an accelerator training program
  94. 94. Cycles: The core of successful innovation Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Align/Ask Build Communicate Check Systematically Improve Value * Value Capture Time
  95. 95. 1. What is innovation 2. Why important 3. Innovation in Practice 4. There is a JTBD for CFOs 5. Strategy 6. Culture 7. Systems first = the solution 8. What you’ll see in this course
  96. 96. Overview Case Studies to apply knowledge Work in the evening to apply learnings to your company Day 1 Day 2 Day 3
  97. 97. SNARCAlignment
  98. 98. Alignment Facts • 90% of Leaders think a good strategy has an impact on business success, but barely 25% of them have a strategy (PWC 2016) • Only 55% of the middle managers can name even one of their company’s top five priorities (PWC 2016) • Less is a lot more (Less strategies and clear no’s)
  99. 99. A very important fact Autonomy is negatively correlated with innovation results In most companies, there is not clarity on what they are doing for customer (70% of companies) People can get lost in what they are doing. When customer focus is high. Both autonomy is positively correlated with results. You gotta get alignment first Source: Cassady 2018 Innovation Results Low Cutomer High Customer 71 57 49 21 Low High Low High Autonomy Autonomy FocusFocus
  100. 100. You’ll learn to make an innovation mission as simple as this one Tetrapak We are looking for markets of size X, where the packaging saves more than it costs
  101. 101. 103 Develop a solution Find a need Find a market Ideas First Success Rate* 5-10% Why… Needs first, not ideas first ! Find a need Develop a solution Find a market Needs First 70 % * According to Strategyn research on outcome driven innovation…
  102. 102. A problem well stated is a problem half-solved. Charles Kettering
  103. 103. Building Ideas
  104. 104. Build Facts 68% of the variance of quality ideas can be explained by this formula Uncreative people are usually better at building big ideas- they don’t fall as easily victim to BSO With the right tools and research anyone can build big ideas
  105. 105. What you’ll learn 1. Effectuation (looking for ideas at home with the resources you have) 2. Stimulus Mining 3. How to leverage diversity 4. Tools and methods to build up to 5X more ideas in half the time 5. Best practices to continue building (instead of shrinking ideas)
  106. 106. Communicate Check
  107. 107. Communicate / check facts • You can’t get feedback unless things are clear • Our ideas are less good than we think they are (remember 75% of ideas fail) • You need to ask for negative feedback (or you won’t get it) • Average ideas = things everyone likes a bit = recipe for failure • “Action land” is almost always better than “thought land”
  108. 108. Adding clarity to communication 110 Depending on the study… 80-90% of advertising does not work… Why …. • Lack of a benefit • No reason to believe • No call to action • No clear message
  109. 109. Getting NPV calculations right
  110. 110. The Math of Innovation
  111. 111. Pretotyping … Fake it before making it IBM speech to text example
  112. 112. You’ll also see pretotyping in action Walhub
  113. 113. Top 20% performers kill 9 times more projects before detailed design starts “Eliminate the walking dead to save the living “
  114. 114. It is easy to kill bad ideas, great companies kill good ideas (early) Steve Jobs 117
  115. 115. Systems
  116. 116. System Facts • “Ideas start as a sparkling star. Then one by one the sparkles and points are taken away until all you have left is an egg. And only chickens market eggs.” • Systems are the products of parts 1*1*0 = 0!
  117. 117. 6 Big concepts
  118. 118. 1. A system versus a process A system is Parts working together to create a shared objective A process is A way of doing things (it doesn’t mean people will work together)
  119. 119. 2. The Stockdale Paradox Confront the most brutal facts of your current reality, whatever they might be. But retain faith
  120. 120. #3 No problems = No progress. [Period.] A focus on Death Threats can increase speed by 60%
  121. 121. 4. Multi-tasking Innovation does not work Source : Simplifying Innovation
  122. 122. 5. Sequential = speed and cash Source : Simplifying Innovation
  123. 123. 5 Step by step is the fastest solution Make sure the right “it” before building “it” True North “Align” “Build” “Check / communicate”#2 Re-think/Re-work “Systematically Improve” What we want To do Work to be done Update Meeting/ research #3 A new cycle with a new challenge Systematically Improve” # 1 Stop
  124. 124. 6. Cycles are not just the front end OngoingCycles Of continuous Improvement Source visual: Driving Eureka
  125. 125. An example of world class … (100 Days) Objectives Process Alignment A new business / business model in 12 weeks A weekly learning cycle every week for 10 weeks A 3 day management meeting to agree «what and why» Plus basic training: How to build ideas/ the importance of systems 2 weeks 10 weeks Alignment Every Monday… what are we going to do this week Build ideas Every Friday… a brain-storming session (with new external people) Communicate Check Real-time research and re-building of ideas External experts to validate/ give feedback on all ideas And involvement of sales Systems Identify death threats/ work on death threats Kill all weak ideas where death threats not resolved in 2 weeks Every Day A 10 minute standing meeting
  126. 126. The ABCs is a not complete re-think • It starts with more clear directions / decisions • The use of tools, methods to build / rebuild ideas • Checklists to improve clarity / and better checks • A commitment to regular review/ decisions 3Ds: Documentation, Deadlines , Discipline
  127. 127. The right role for a C!O
  128. 128. Working towards Monday Change only happens when change happens ! We’ve been taught Motivation  Habits Resolve to start Start small with small targets A daily/ weekly habit with small, noticeable wins
  129. 129. Don’t think how long Think how easy how many how better
  130. 130. What next … Lunch then a lot of work
  131. 131. Innvovation for CEOs and CFOs (Draft) A 3-day course that will deliver Work outside class 1/. Strategy, 2/. Cultural understanding, and 3/. Systems to build bigger ideas, faster while reducing risks Subject When Content Booth Collaboration Feeling Outcomes Readings (Optional) Introduction Wed Morning A new view on innovation Innovation Fails due to Strategy, Culture, Systems Work on systems and everything will get better There are no easy solutions, but I am ready to get started Interest in the rest of the course Your Innovation needs a strategy (HBR) Introduction Cycles Alignment Wed. Afternoon Strategic disciplince in Innovation Definition of Core Jobs to be done Business model Innovation (Share toolkit part 1) Strategy: Joint development of strategy framework There are some basic questions I have not been asking that I need to be asking Methods to decide, communicate innovation objectives Summary: The Innovators Dilema Summary: Repeatability Summary: Competing against luck St. Gallens, business model innovation Section Alignment (Cycles) Build ideas Thursday Am Effectution Stimulus mining Ideation tools Tools to build ideas How to build a spark deck I can build ideas too, this is not the hard part How to keep idea building on target Summary : Jump start your business brain Section Build (Cycles) Communicate and Check Thursday Aft Research for Innovation Pretotyping Market math and metrics Progress tracking How to best kill ideas (Share tooklit part 2) Finance: Joint development of innovation portfolio assessment They have been hiding a lot from me, I need to get more into the details How to set expectations and better validate an idea Video : Pretotyping Article: What is killing Innovation Section Communicate and Check (Cycles) Pre-event V1 : Innovation Strategy V2 : Innovation Strategy Case Study: How to make innovation happen without creating an "Innovation program" Facts: less is more, the job of everyone, everyone build better ideas, most ideas bad, ongoing learning = key to success Discussion : How are you thinking different about Innovation Pre-course: Innovation readiness assessment Optional : Pre-readings and videos: Summary The Halo Effect. Book: Cycles / Driving Eureka Case Study: A new product idea (TBD) - able to be tested fast Work in groups: Building systems to make innovation happen without creating an "innovation program" Switch Groups to show the power of idea building Test an idea: it is not that hard Day 2 Day 1
  132. 132. Systems (And Culture) Friday Morning A learning organization Profound knowledge (business are systems) Bright Spots and Death Threats Focus on constraints Sequential versus parallel (Share toolkit part 3) Operations: Joint development of the TOC link Crawl, walk, run makes sense. Yes , less can be more ! Where to start from a cultute perspective. How to start building a system people will usee Summary : Simplifing Innovation Article: Deming’s Profound Knowledge and Leadership Section Systems(Cycles) Case Study Friday afternoon Use of all skills in a case I can apply these ideas to someone else Real life application of the ideas learned TBD Finding Alpha Friday afternoon An Innovative way to use innovation to make investment decisions This makes sense Ways I could use this tomorrow Reading on Innovation readiness asssement Closing You don't need to do everything now, you need to identify the critical path Action alternatives This is not that hard Agree to 1 Action And how to share with colleagues A sample presentation to share Summary : The knowing, doing gap Evidence based Learning by doing Toolkits to accompany each part of the course Application of ideas, so you start taking action next Monday An audit they will use in the course (and can use after the course) Optional: Certification, Train the trainers, company trainings Day 3 Work in groups: What is on your critical path/ Organizational barriers Reflection time : writing ideas down V3 Innovation strategy in one to one groups Share ideas in the group Unique course Features Discussion : Were you able to get feedback in less than 12 hours … what prevents you from doing this everyday Post-Event A free one hour talk on results (sell local trainings)
  133. 133. Summary to discuss course ideas * Front end and back end of innovation * Systems first approach * The specific focus should sell * All 3 major failures of innovation * Restricted to CFO and COOs * A logical link to Strategy * A cultural assessment Company trainings Culture * A toolkit for each section of the course On-line trainings Systems * Focused on behavioural change * Video version possible * Linked to things they will have seen: Focus => Simplicity and Ease * Linked to a book that will be well promoted Design Thinking, Lean, Agile Stories => Motivation * Most importantly, it will increase the number of Systems => ability big ideas, increase speed and reduce risks Applied cultural development => ability Cycles => prompts and forced learning NOT Big Bang * Linked to finances / numbers Meaningful Unique Value Capture

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