The Paradox of Disruption - CMA B2B Innovation Conference

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Disruptive Innovation:
The Paradox of Disruption

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POWER AND CONTROL
THE WHOLE HISTORY OF ORGANIZATION AND
MANAGEMENT THEORY IS BASED ON THE IDEA THAT
IT IS POSSIBLE TO ORGANIZE, PREDICT, AND CONTROL.

!
DIALECTICAL OPPOSITES
Innovate Avoid Mistakes
Think Long Term Deliver Results Now
Cut Costs Increase Moral
Reduce Staff Improve Teamwork
Be Flexible Respect the Rules
Collaborate Compete
Decentralize Retain Control
Maintain Focus Be Opportunistic
Low Costs High Quality

–Ben Horowitz
“By definition they
are not obvious. In
fact, they seem
insane. If they didn’t
seem insane at the
time, they wouldn’t
be breakthroughs” Source: http://ilovefaygoslushies.deviantart.com/art/Insane-Base-415796210

PETER DRUCKER,
“BECAUSE THE PURPOSE OF BUSINESS IS TO
CREATE A CUSTOMER, THE BUSINESS ENTERPRISE
HAS TWO – AND ONLY TWO – BASIC
FUNCTIONS: MARKETING AND INNOVATION.
MARKETING AND INNOVATION PRODUCE
RESULTS; ALL THE REST ARE COSTS.”

"What new and different things do we have to do, and when?"
–Peter Drucker

TOGETHER
OptBimE iOzaPtEioNn A N DS uLsItSaTinEiNng Breakthrough Disruption
Disruptive Innovation
80%
Sustaining Innovation
Disruptive Innovation 20%
New Markets /!
New Revenue!
Optimizing !
Existing Markets / !
Revenue Streams!
New Markets /!
New Revenue!

!
“SO ASK YOURSELF THREE QUESTIONS.”
!
WHAT KIND OF INNOVATION DO I WANT?
!
HOW MUCH INNOVATION DO I WANT?
!
WHEN DO I WANT IT?

“FINANCIAL MIS-DIRECTION”
Projected cash stream from
investing in Innovation & Marketing
More likely cash stream
resulting from doing
nothing
DCF and NPV
methodologies
implicitly make this
comparison
Companies
should be making
this comparison
B
Assumed cash
stream resulting
from doing nothing
A
C

TOGETHER
!
ELASTIC
!
• FLUIDITY TO ADAPT
AND RESPOND
http://www.bluefinsolutions.com/Bluefin/media/Bluefin/PDFS/Bluefin-Solutions-Elastic-Innovation-Index-2014-Global-top-50-most-innovative-companies-(2).pdf!
!
• ABILITY TO CREATE
DEMAND

TOGETHER
ELASTIC
Adaptive
Cloud Infrastructure and Device Centric
Developer-centric / Computational
Ideas Economy
Radical Adjacencies
Social Communications
Ecosystems
Mass Differentiation
Creative Independent Talent
Continuous Strategy
Multiple Options Management
http://www.bluefinsolutions.com/Bluefin/media/Bluefin/PDFS/Bluefin-Solutions-Elastic-Innovation-Index-2014-Global-top-50-most-innovative-companies-(2).pdf!

ARIE DE GEUS,
“RESILIENT, LONG-LIVED COMPANIES ARE
THOSE THAT EXHIBIT CERTAIN OF THE
BEHAVIOURS AND CHARACTERISTICS OF
LIVING ENTITIES.”
✤ Strong sense of community and
collective identity around a set of
common values
✤ Community where all members know that
they will be supported in their
endeavors to achieve their own goals – as well
as the global goals of the community
✤ Openness to the outside world, tolerance for the
entry of new individuals and ideas – in
essence a manifest ability to learn
and adapt to new circumstances

A
“
THOSE THAT EXHIBIT CERTAIN OF THE
BEHAVIOURS AND CHARACTERISTICS OF
LIVING ENTITIES !
“INNOVATE OR DIE”

!
EXPERIENTIAL WORKSHOPS WHERE YOU
CAN PRACTICE “DOING DIFFERENT”

!
THE LEARNING & INNOVATION LOOP
Directional
Knowledge
Identity & Motivation
Conceptual
Knowledge
Understanding &
Organization
Experiential
Knowledge
Skills & Awareness
Source: Knowledge System (Artistry Unleashed - Hilary Austen)
Mastery:
Applying Developed
Knowledge
Recognition, Effectiveness,
Expertise, Purpose, Focus
Guides
Guides
Informs
Informs
Originality:
Generating New
Knowledge
Perception, Creativity, Innovation,
Flexibility, Openness

!
WE HAVE ALREADY MOVED FROM
MANAGEMENT TO LEADERSHIP – AND
NOW WE’RE GOING BEYOND
LEADERSHIP TO INSPIRATION…
!
LEADERS MUST HELP PEOPLE
ACCESS THEIR SOURCES OF
INSPIRATION, INTUITION AND
IMAGINATION…
!
TO FACILITATE SO THAT MY TEAM CAN
SENSE AND SEIZE EMERGING
OPPORTUNITIES AS THEY ARISE IN
TODAY’S FAST PACED ENVIRONMENT

TOGETHER
Drucker 7-Sources Christensen Disruption
The Unexpected
Success
Failure
Outside Event (Eureka Moment !)
Incongruity in Reality
Asymmetry in Experience
Innovation on Process Need
Bridging a Gap
Change in Market Structure
Demographics
Changes in Perception
Society Bites Back
New Knowledge
What:
1) Simpler, Cheaper, &
Good Enough
!
2) Micro-Market
Underserved &
Uncontested
!
How:
1) Job-to-be-Done
2) Combinatory
3) Adjacencies
4) Trade-offs
!

TOGETHER
Christensen
Horowitz

TOGETHER
!
Customers Refusing
Soon
to
be
Non-‐Customers
Non-‐Customers
Unexplored
Non-‐Customers

TOGETHER
OBptEim OizPaEtNio nA N D SLuISsTtaEinNing Breakthrough Disruption
Optimize Differentiate Value Prop.
!
Customers Refusing
Soon
to
be
Non-‐Customers
Non-‐Customers
Unexplored
Non-‐Customers
20% 80%
Problems, Needs,
& Use Cases
Degrees of Doing
Things Differently

PROUST
““THE REAL ACT OF DISCOVERY CONSISTS
NOT IN FINDING NEW LANDS, BUT IN SEEING
WITH NEW EYES”
!
WHAT BUSINESS ARE WE IN AND IS IT THE RIGHT BUSINESS?!
!
CAN WE CREATE FUNDAMENTALLY NEW PRODUCTS AND SERVICES?!
!
CAN WE REDEFINE THE BOUNDARIES BETWEEN DIFFERENT INDUSTRIES
AND SERVICES SO THAT NEW NICHES EMERGE? !
!
CAN WE STRUCTURE OUR ORGANIZATION AROUND BUSINESS
PROCESSES THAT REFLECT A CUSTOMER VIEWPOINT RATHER THAN THE
INFLUENCE OF TRADITIONAL DEPARTMENTAL STRUCTURES?!
!
CAN WE REDESIGN BUSINESS PROCESSES IN A WAY THAT WILL
INCREASE THE QUALITY OF PRODUCTION AND REDUCE COSTS?!
!
CAN WE REPLACE OUR ORGANIZATIONAL HIERARCHY WITH A
NETWORK OF SELF-ARRANGED TEAMS?!

TOGETHER
Sustaining Innovation
Problem is Understood!
Existing Market (red ocean)
Improves Performance
Lowers Cost !
Incremental Change!
Customer is Known!
Market is Predictable!
Traditional Business Model!
Talk to Mainstream!
Market Research!
Disruptive Innovation
Problem is Undefined
New Market (blue ocean)
Innovation is a dramatic
game changer
Customer doesn’t know
Market is Unpredictable
Traditional Models Fail
Talk to Early Adopter
Customer Development
Gaps/Biases
Overshoot in
Sustaining
Innovation
!
Status Quo /
Extrapolated
Financial
Forecasts
!
Understated /
Invisible Threats
!
Commitment to
Sunk Costs
!
Lack of empathy

TOGETHER
More Options &
Possibilities
Order Chaos
More Insights
& Patterns

TOGETHER
Launch180: GTA Incubator/Accelerator

!
INNOVATION CHALLENGES
!
FOOD AND NUTRITION BEHAVIOUR
!
SENIORS AGING AT HOME
!
AFFORDABLE / SOCIAL HOUSING
!
EARLY CHILDHOOD DEVELOPMENT
!
EXPERIENTIAL EDUCATION
!
INNOVATION & INCUBATION
!
HACKING TRADITIONAL MEDIA
!
LEADERSHIP & CULTURE

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
SOLUTION
UNINTENDED
CONSEQUENCE

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
SPECIALIST
GENERALIST

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
EXPERT
CROWD

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
FINITE
INFINITE

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
REALITY
PERCEPTION

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
FIXED
CAPITAL
HUMAN
CAPITAL

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
INFORMATION
KNOWLEDGE

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
PLANNED
SURPRISE

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
COMPLICATE
COMPLEX

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
BIG
DATA
STORIES
EMPATHY

TOGETHER
!
Soon
to
be
Refusing
Non-‐Customers
Unexplored
Non-‐Customers
ARROGANCE
EXPERIMENTS

LIBERTÉ
ÉGALITÉ
FRATERNITÉ

LIBERTÉ, ÉGALITÉ, FRATERNITÉ

The Paradox of Disruption - CMA B2B Innovation Conference

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