Corporate Entrepreneurship and Business Innovation. Scott Bowman Partner, Clareo

Transcription

1 Corporate Entrepreneurship and Business Innovation Scott Bowman Partner, Clareo

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3 Corporate Entrepreneurship Corporate Entrepreneurship (CE) is the process by which teams within an established company conceive, foster, launch and manage new business initiatives that are distinct from but leverage the parent firm s assets, market position and capabilities. 3

4 First Hand Experience 4

5 This is harder than ever Houston, we have a problem. 70% of CEOs that name innovation as top 3 priority 93% of CEOs that say innovation is vital to long-term success Nearly 50% of CEOs dissatisfied with return on internal innovation investments 1 in 5 CEOs Believe their innovation is enabling them a competitive advantage #1 Obstacle For innovation is slow development cycle times Only 1 in 3 CEOs believe they have a well-defined innovation strategy * Business Week / BCG CEO Most Innovative Companies Survey; Accenture CEO Survey,

6 and more important than ever (change and disruption are the new normal) 6

7 Does your company struggle with creating totally new innovations and/or new businesses? Why do you think it is so difficult? 7

8 Innovation through Big Data and IoT: Emerging Technologies Group (ETG) 8

9 Global Technology Council (GTC): Creating Sustained Pipeline of Longer Term (4+ years) Breakthrough Innovations 9

10 Mentoring Teams to Create New Businesses: Taleris (GE-Accenture JV) 10

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12 No One Size Fits All Study of CE programs at nearly 30 leading firms along factors such as leadership, strategy, structure, process, people, resources, linkages and culture. Examples: Two dimensions (out of many) explain most of the variability: Organizational ownership (who is charged with CE?) Resource authority (where does funding reside?) The differences are critical to the successful management of CE 12

13 Two Dimensions Four Models Dedicated Resource Authority Ad Hoc Diffused Focused Organizational Ownership 13

14 Four Models of Corporate Entrepreneurship Corporate venturing tends to fall into Producer and/or Advocate model The Enabler The Producer Dedicated Resource Authority Procedures for finding, selecting and resourcing NBC No formal, dedicated organization The Opportunist Formal organization with specific mandate to create new businesses Significantly self-funded, or controlling others resources The Advocate Ad Hoc No (or limited) formal CE procedures or organization Social networks drive NBC selection & resourcing Defined organization acts as a facilitator and proponent Limited budget; majority of funding from Business Units Diffused Focused Organizational Ownership Office of the CTO 14

15 Evolution in Models Over Time All firms begin as Opportunists. By nature, small, growing firms focus on their core business. If they pursue CE, it occurs opportunistically, and without formal processes. Even after maturation, most firms require sufficient growth pressure and/or competitive threats to embark on true, structured CE efforts, which require substantial resources and leadership attention. Dedicated Resource Authority Ad Hoc The Enabler The Opportunist The Producer The Advocate Diffused Focused Organizational Ownership 15

16 Discussion: What are some examples of programs or groups within your company that resemble one or more of these models? What do you believe are the success factors and challenges of each model? 16

17 Five Key Principles We ll Discuss Today 1. Define your objective clearly 2. Build a strong connection with your plan for innovation 3. Pick the right internal customers and forge strong alliances 4. Design small experiments to test, learn & scale 5. Do everything you can to gain an external perspective 17

18 Principle #1: Clarify the Objective (Top Factor) Enable Innovation Company-Wide Transform Existing Businesses Build Truly New Businesses Enabler Producer Enabler Producer Enabler Producer Opportunist Advocate Opportunist Advocate Opportunist Advocate 18

19 CEO: What do we do about a world that doesn t need lubricants? 19

20 Castrol 2020: Creating the Agenda Summer/Fall 2010 Fall 2010 / Spring 2011 Fall 2011 Futures External Collaboration Internal Ideation Prioritized Portfolio All three business: automotive, manufacturing, marine Global view: Silicon Valley, London, Shanghai, Bangalore Powerful, collaborative sessions with externals Senior leadership involved in futures and implications Ideation (multiple rounds) Clustered into territories Consumer galleries insight External validation Opportunity profiles Portfolio assessment Creation of territories Agenda for the future 20

21 Castrol Beyond Lubricants: THE FUTURES 21

22 Castrol innoventures Today Supporting customers in facilitating and improving the production and logistics process. Exploring and investing in technology leadership in liquids and materials, transform the capabilities of engines and machines. Portfolio strategy and innovation approach linked to focus areas Intelligent Operations Next Generation Engineering Explicit mandate to be a Producer Responsible Castrol Smart Mobility Providing sustainable solutions for consumers and industry in the context of accelerated demand and a low carbon world. Providing a better Mobility Experience in the vehicle, around the vehicle and independent of the vehicle. Organization, structure, governance & process for innovation beyond the core 22

23 Powerful New Business Engine, Fueled by Venturing Unit 23

24 How do we organize to enable existing businesses? (very different objective than Castrol) 24

25 Acting as an Advocate: Transforming, Enabling and Growing Existing Businesses BP Office of the CTO Deliberately small team, connected to the business Develop deep knowledge of the business Create scanning & partnering function Search & apply with VC community Evangelizing new technologies (blue chalk sessions) Relevance, technical readiness $100m+ per year in cost savings to BP in 5 years Sensor networks, predictive analytics, field automation 25

26 The Differences are Significant 26

27 Principle #2: Build a strong connection with your plan for innovation 27

28 Innovation is about New Value, Not Just New Things Partnership Innovation Relational Excellence Value Amplification Offering Innovation Product Leadership Functional Value Operations Innovation Operational Excellence Economic Value z Customer Innovation Customer Intimacy Emotional Value 28

29 Innovation is about New Value, Not Just New Things 29

30 Connecting Innovation to Business Challenges 30

31 Connecting Innovation to Business Strategy Design Manufac- turing Inventory End to End ownership GAP owned Outsourced GAP owned Gross Margin Productivity: Zara vs. Gap $100 Regular Price GAP Markdown $85 Regular Price 15% Price advantage ZARA Despite lower prices and higher costs, Zara s gross margin dollars are 55% greater than Gap Markdown $30 COGS 50% at Reg 20% Cost disadvantage $36 COGS 80% at Reg Legend: Gross Margin COGS All Rights Reserved Source: Keeping Inventory- and Profits off the Discount Rack, Strategy + Business reader, 2008 Prepared exclusively for 31

32 Connecting Innovation to the Company s Strategic Aspiration, Mandate Novo Nordisk Aspiration: To defeat diabetes by finding better methods of diabetes prevention, detection and treatment What growth options should we consider? 32

33 Connecting Innovation to the Company s Strategic Aspiration, Mandate Next-generation insulin with 40 hours coverage vs hours (industry average) PYY gut hormone to counteract obesity by regulating appetite Stakeholder Engagement: Diabetes Attitudes, Wishes and Needs ( DAWN ) study World Diabetes Foundation (WDF) Education, Solutions: First-ever insulin dosing guide & physician solution for iphone Changing Diabetes in Children programme: Clinics to diagnose & treat children with Type 1 diabetes in developing countries Focus on customer experience, not just science new delivery systems (e.g. FlexPen and NovoPen) 33

34 Question: How well defined socialized aligned is your plan for innovation at your company? 34

35 Principle #3: Forge strong internal alliances 35

36 Do Your Internal Partners Understand? 36

37 Amway Business Innovations Before and After Pick your internal customer Secure strong sponsorship Build relevance Speak their language Remember: this is a relationship game 37

38 Principle #4: Design small experiments to test, learn and scale 38

39 This is not only for startup companies Culture Change FastWorks Being leaner, faster and closer to customers 39

40 Organizing for Experimentation General Mills created a digital marketing experimentation program, called G-WIN. Goal: Create powerful insights and create new consumer engagement models 40

41 Principle #5: Do everything you can to gain external perspective

42 Corporations seek the predictable startups seek out the possible. Corporations are about managing known risks startups are about embracing and eliminating uncertainties. These are radically different paradigms 42

43 The World of Corporate Venturing Briefly Corporate Venturing: structured approach for investing in and/or partnering with the startup ecosystem. More than a passing fad ~7,000 investments in the past 10 years Over $3 billion invested last year 18% of all U.S. venture deals CVC backed How much has your unit invested in its history? Zero to $50m 27% More than $1bn 9% $500m to $1bn 6% $300m to $500m 8% Multiple reasons / motivations $50m to $100m 23% $100m to $300m 27% 43

44 Source: BMW Accelerating New Innovation in Emerging Areas Car Sharing Peer-to-Peer Car Sharing CS Technologies Public EV- Networks Peer-to-Peer EV- Networks EV Technology Smart Grid Car sharing and per usage models E-Mobility Intelligent parking solutions Intermodal Solutions Locationbased and ad-hoc services Peer-to-peer parking Parking Technology On/Off-street parking Infotainment Pedestrian Navigation Smart Traffic Big Data / Analytics Ride Sharing Routing & Information Intermodal Navigation 44

45 This may be a matter of corporate life or death (in Millions) $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $ ,153 1,146 1,337 1,548 1,491 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q ,657 1,878 2,

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48 Take a minute to reflect What is one thing you believe you should begin working on next week, based on what we ve discussed today? 48

49 Closing Thought: Connect innovation to a Broader Mission 49

50 Thank you for your time Contact Info: Scott D. Bowman Partner, Clareo e: c: