A Keynote presentation from the Back End of Innovation Conference
The first slide gave away the four secrets in brief form:
- Scale up
Paul began his talk with a metaphor, the new SalesForce building—a new type of structure that is unprecedented in earthquake zones because it was so safe. He claims companies need to re-think their current business model and processes in like fashion.
Deconstruction: select dismantling of certain components.
“The question is where to destruct and reconstruct to get the most impact in your organization:
- Supply Chain
- Go-to-market patterns
Look at how many functions needed to be addressed to be effective,” he adds. “Each department has gold and platinum rules—platinum rules need board approval for change, but we got it and you can too.”
Advice: “You can use the Business Model Canvas and mark where the traditional approach still works and where you need reconstruction to be an effective innovator,” says Paul.
“Here’s what I learned at one company: 75% of projects were cancelled within six months of transferring to core business from the innovation group. So we incubated the businesses to where they were generating real revenue. This accelerator helped us de-risk the concepts before handing them off to the core business. You have to validate the business model before sending over the transom.”
Having a place where you can protect and incubate these concepts is key.
An energy company had “a great strategy and great culture, but had grown only through acquisition. They couldn’t incubate businesses inside the company,” he says. Using a mix of Innovation Methods and Lean Innovation (Design Thinking and Lean Innovation Training Program) and had good successes.
At Gore “we realized we needed partnership with startups to get new materials in and also to give these startups our materials.”
Gore was founded in 1958 and is privately held. Goretex is used for outdoor wear, military, and first responders. They also have an industrial division and Elixir guitar strings. “Lastly we have a medical products division, including cardiac implants.”
One of the things that has made Gore “is a unique culture that empowers employees to follow their passion—this is how Elixir strings were born. It created a fantastic culture for ideation, but our challenge is turning the ideas into good businesses.”
The best funding model for innovation “is a Venture Model—have a set aside budget, but you can treat it like an ATM. You have to start adding 0000s to your request when in market, factors of 10 or 100—if you can get the CFO and CEO to set aside a slush fun,” he says. “The money doesn’t live in the P&L of the innovation department. If you treat it like a budget you have to spend it rather than just being called upon.”
Image Credit: Pixabay
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Michael Graber is the managing partner of the Southern Growth Studio, an innovation and strategic growth firm based in Memphis, TN and the author of Going Electric. Visit www.southerngrowthstudio.com to learn more.