©2014  FCB  Partners.  All  rights  reserved.  

Brad  Power  and  Steve  Stanton  

Webinar:    March  25,  2014  

CoExistence:  Today’s  Performance  Engine  AND  Tomorrow’s  Innova=on  Energy    

Are  You  Tuning  the  Performance  Engine  or  Innova=ng?  

The  Performance  Engine   An  Innova=on  Ini=a=ve  

�  Day-­‐to-­‐day  �  Sustaining,  incremental  

�  Repeatable,  predictable  

�  Occasional  �  DisrupKve,  radical  �  Uncertain  outcomes  

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Can  You  Create  an  Organiza=on  that  Embraces  Con$nuous  Innova$on?    Why  Now?  

Drivers  

�  Social,  mobile,  ‘Big  Data’,  cloud,  sensors,  cameras  

�  SoOware  is  eaKng  the  world  

Threats  

�  Shorter  produce  lifecycles  

Opportuni=es:  Role  Models  

�  High-­‐tech  disruptor:  Google  

�  Retail  and  high-­‐tech  disruptor:  Amazon  

�  Product  disruptor:  3M  

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Amazon’s  Approach  to  Con$nuous  Innova$on  

Innova=on  Examples  

�  Kindle  

�  Web  services  

�  Amazon  Prime  

�  Drones?  

Management  System  

�  Think  big:  the  everything  store  

�  Focus  on  customer  value  

�  Disrupt  yourself  (used  books,  Kindle)  

�  Set  up  lab  in  Silicon  Valley  (A9,  Lab  126)  

�  AcquisiKons  (Zappos)  

�  Missionary  (relentlessly  disrupKve)  and  mercenary  (calculaKng  and  ruthless)  

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Google’s  Approach  to  Con$nuous  Innova$on  

Innova=on  Examples  

�  Driverless  car,  maps  

�  YouTube  

�  Google  Glass  

�  Google  Fiber,  Project  Loon  

�  Google  Goggles  

Management  System  

�  Google[x]  (moonshots)  

�  AcquisiKons  (Makani)  

�  20%  Kme  

�  Quick  demos  

�  Run  lots  of  experiments  and  let  the  market  decide  

�  Fail  fast  and  learn,  scale  up  quickly  if  it  shows  promise  

�  Culture  of  openness,  analyKcal  rigor,  and  respect  for  workers  

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3M’s  Approach  to  Con$nuous  Innova$on  

Innova=on  Examples  

�  Scotch  tape  �  Post-­‐Its  �  Thinsulate  

Management  System  

�  15%  rule  (free  Kme)  

�  InnovaKon  centers,  labs  �  Technical  council,  forums  

�  30%  rule  (new  products)  �  6%  rule  (R&D  spending)  �  Seed  capital  �  Technical  career  track  �  Rewards  (Carlton  Society,  

Golden  Step)  

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What  do  we  mean  by  CoExistence?  

�  There  are  four,  powerful  and  compeKng  forces  operaKng  in  all  organizaKons  today:  –  The  turbulence  of  the  day  job  –  The  incremental  process  improvement  world  –  The  search  for  sustaining  innovaKons  –  The  hunt  for  disrupKve  innovaKons  

�  All  are  essenKal,  but  truly  different  in  most  respects.  

�  In  a  perfect  environment  with  finite  resources,  an  organizaKon  would  have  all  operaKng  together  in  harmony,  with  the  right  proporKon  of  resources  devoted  to  each.  

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Tidal  Forces  at  Play  

The  Turbulence  of  Daily  Opera=ons  

Incremental  Improvement  

Sustaining  Innova=on  

Disrup=ve  Innova=on  

Day  Job   Six  Sigma   Lean   ReinvenKon  

Current  op  model   Current   Current   New  

Work   Improve   Change   Transform  

Performance  Engine  

Performance  Engine  

ConKnuous  InnovaKon  

ConKnuous  InnovaKon  

OperaKon   OperaKonal  Excellence  

OperaKonal  Excellence  

Product  Leadership  

Sameness   Beper  Sameness   Much  Beper  Sameness  

Different  

Stable   Small  Incremental   Bigger  Incremental   DisconKnuous  

Today’s  results   Near  Future   Near  Future   Farther  Future  

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Propor=onal  to  Disrup=on?  

Stable  World   Change  Coming  

Disrup=on  Now!  

You?  

Daily  OperaKons  

           90%                    85%                    75%  

Incremental  Improvement  

               5%                        5%                      5%  

Sustaining  InnovaKon  

                 5%                        5%                      5%  

DisrupKve  InnovaKon  

                       5%                    15%  

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However…  

�  On  one  hand,  organizaKons  absolutely  must  drive  their  Performance  Engines  to  produce  the  processes  and  results  that  are  needed  for  today’s  customers.  

�  On  the  other  hand,  organizaKons  must  also  generate  ConKnuous  InnovaKon  Energy  to  prepare  for  and  evolve  into  successful  futures.  

�  In  many  organizaKons,  these  two  imperaKves  are  in  direct  conflict  and  resource  investment  is  imbalanced.  

�  In  reality,  as  most  large  tradiKonal  companies  compete  for  scarce  resources,  the  Performance  Engine  almost  always  wins  the  lion’s  share.  

�  Sustained  success  requires  a  well  designed  and  evolving  strategic  balance  between  the  Performance  Engine  and  ConKnuous  InnovaKon.  

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Brad:  Where  to  Start?  1.  Build  the  sense  of  urgency:  

How  big  is  the  threat  of  disrupKon?  OpportuniKes?  

2.  Form  a  guiding  coaliKon  

3.  Develop  a  vision:  IdenKfy  ‘moonshots’  driven  by  emerging  technology  

4.  Organize:  Process  owners,  Process  innovaKon  lab  

5.  Define  and  start  tracking  process  innovaKon  measures  

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Steve:  Where  to  Start?  

1.  Measure  and  allocate  resources  explicitly  across  4  domains  

2.  Ensure  discrete  sponsorship  for  each  domain  

3.  Do  less  4.  Sharpen  strategy  and    strategic  planning  outcomes  

5.  DramaKcally  improve  ‘sensing’  processes  

6.  Be  even  more  paranoid  

7.  Have  balanced  measures  and  execuKve  incenKves  

8.  Think  Big,  Start  Small,  Learn  Fast