Dealing with Darwin

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25 Νοε 2013 (πριν από 3 χρόνια και 11 μήνες)

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Dealing with Darwin

How Great Companies Innovate at Every
Phase of Their Evolution


www.dealingwithdarwin.com


Geoffrey Moore

Managing Partner

2

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

The Set Up


Why Darwin?


Influx of offshore competition and new market formation


Natural selection is driving to survival
-
of
-
the
-
fittest outcomes


Enterprises must differentiate to gain competitive advantage


The Problem


Enterprises spend heavily on innovation for competitive advantage


Not enough to competitive advantage to show for it (commoditization)


High failure rates signal a need for better mental models


Crossing the Chasm, Inside the Tornado, The Gorilla Game


Dealing with Darwin


Better mental models for managing
innovation
and
inertia


Best practices based on new models


Showcase Cisco as a case study

3

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Return on Innovation

Waste

Catch
-
Up

Differentiation

Productivity

Waste: Innovation projects that fail to create

definitive separation from competitive offerings:

Not going far enough in the right direction

4

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Time

Revenue Growth

Technology Adoption

Life Cycle

Early

Main Street

Mature

Main Street

Declining

Main Street

Indefinitely elastic

middle period

End of

Life

A

Fault

Line!

E

D

C

B

Innovation’s Landscape

The Category Maturity Life Cycle

5

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Disruptive

Innovation

Application

Innovation

Product

Innovation

Platform

Innovation

Enhancement

Innovation

Integration

Innovation

Experiential

Innovation

Process

Innovation

Marketing

Innovation

Broad Universe of Innovation Types

Different Types Get Traction at Different Points

Value Migration

Innovation

Line Extension

Innovation

Value Engineering

Innovation

Harvest

& Exit

Renewal Innovation

Organic

Renewal

Acquisition

Renewal

6

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Managing Innovation

Four Innovation Zones

Disruptive

Innovation

Application

Innovation

Product

Innovation

Platform

Innovation

Enhancement

Innovation

Integration

Innovation

Experiential

Innovation

Process

Innovation

Marketing

Innovation

Business Model

Innovation

Line Extension

Innovation

Value Engineering

Innovation

Harvest

& Exit

Renewal Innovation

Product

Leadership

Zone

Operational

Excellence

Zone

Customer

Intimacy

Zone

Value

Renewal

Zone

7

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Innovating for Growth Markets

The Product Leadership Zone

Disruptive
Innovation

Application
Innovation

Product
Innovation

Platform
Innovation


Enterprise:

Genentech (recombinant DNA)


Consumer:

Skype (VOIP)


Enterprise:

Landmark (3
-
D seismic interpretation)


Consumer:

Amazon (Internet retailing)


Enterprise:

Cisco (Internet routers)


Consumer:

Cuisinart (food processors)


Enterprise:

Oracle (relational databases)


Consumer:

Sony (game machines)

Return on innovation requires differentiation


All these companies achieved separation from their competition

8

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Innovation Types for Mature Markets

The Customer Intimacy Zone

Experiential
Innovation

Line Extension
Innovation

Enhancement
Innovation

Marketing
Innovation


Enterprise:

Cognos (executive dashboards)


Consumer:

Swatch (fashion watches)


Enterprise:

McKinsey (relationship marketing)


Consumer:

Mattel (American Girl franchise)


Enterprise:

World Economic Forum (Davos)


Consumer:

Disney (theme parks)


Enterprise:

Boeing (737 line of aircraft)


Consumer:

Yahoo (internet portal services)

Return on innovation requires differentiation


All these companies achieved separation from their competition

9

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Innovation Types for Mature Markets

The Operational Excellence Zone

Process


Innovation

Integration
Innovation

Value Engineering


Innovation

Value Migration
Innovation


Enterprise:

Celera (shotgun genomic sequencing)


Consumer:

McDonald’s (fast food)


Enterprise:

IBM (hardware to software & services)


Consumer:

HP (printers to inkjet cartridges)


Enterprise:

SAP (Enterprise Resource Planning)


Consumer:

Victorinox (Swiss army knives)


Enterprise:

TSMC (silicon foundry)


Consumer:

BIC (ballpoint pens)

Return on innovation requires differentiation


All these companies achieved separation from their competition

10

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Innovating for Declining Markets

The Category Renewal Zone

Organic

Renewal

Acquisition

Renewal

Harvest

& Exit


Enterprise:

Alcatel (from switched voice to IP video)


Consumer:

Apple (from PCs to consumer electronics)


Enterprise:

EMC (from storage hardware to software)


Consumer:

Altria (from tobacco to food & beverage)


Enterprise:

AT&T (long distance telephony)


Consumer:

Oldsmobile (automobiles)

Return on innovation requires differentiation


All
these

companies achieved separation from competition

These

did not

11

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Managing Inertia

The Core/Context Analysis Framework

Core

Targeted

Innovation

Vector(s)

Context


All other

Activities

Mission Critical

Process shortfall creates


serious and immediate risk

Non
-
Mission
-
Critical

All other processes

Differentiation

Risk

Supports change

Retards change

12

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

The Natural Cycle of Innovation

Inhale/Exhale

2. Deploy

1. Invent

4. Offload

Core

Context

Mission Critical

Non
-
Mission
-
Critical

3. Manage

Manage

Mission
-
critical

Processes

At Scale

Extract

Resources

To Repurpose

For Core

Invent

Differentiated

Offering

Deploy

Differentiation

At Scale

Fund next innovation

13

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Mission Critical

Non
-
Mission
-
Critical

Clinging to Context

Where Resources Get Stuck

2. Deploy

1. Invent

3. Manage

4. Offload

Resources

get stuck

here

Resources are

added

here for

support

Resources

still get

invested here

But lack of

resources here

results in failure
to deploy!

4. Onload

Mission
-

critical

risk

Core

Context

14

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Core

Context

The Six Levers Model

Extracting Resources from Mission
-
Critical Context

1.
Centralize.

Bring operations under a single authority to
reduce overhead costs and create a single decision
-
making
authority to manage risk

2.
Standardize.

Reduce the variety and variability of processes
delivering similar outputs to further reduce costs and minimize
risks.

3.
Modularize.

Deconstruct the system into its component
subsystems and standardize interfaces for future cost
reductions.

4.
Optimize.

Eliminate redundant steps, automate standard
sequences, streamline remaining operations, substitute lower
-
cost components, or otherwise cost
-

and resource
-
reduce.

5.
Instrument.

Characterize the remaining processes in terms
of the variability of key parameters and develop monitor
-
and
-
control systems to manage their performance.

6.
Outsource.

Drive processes out of the enterprise entirely to
further reduce overhead, variabilize costs, and minimize future
investment. Incorporate vendor use of monitor
-
and
-
control
systems into Service Level Agreement.

15

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Unblocking the Flow of Talent

Resource Recycling Zones


A

C

B

Work circulates clockwise

People recycle counter
-
clockwise within zones

IV

III

II

I

16

Presentation Title © 2003, TCG Advisors LLC

November 25, 2013

Three Roles for Continuous Innovation

Invention

Zone

Deployment

Zone

Optimization

Zone

Business entrepreneurs

Think outside the box to
create new core

Program managers

Think inside the box to
manage mission
-
critical
processes at scale

Process optimizers


Use the Six Levers to extract
resources from context to
repurpose for core