Nils Tarnow Presentation to LAV-Young Professionals ...
Transcript of Nils Tarnow Presentation to LAV-Young Professionals ...
What is Innovation and how to capture it for your business?
Nils Tarnow
Presentation to LAV-Young Professionals
February, 25, 2021
What is Innovation?
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it’s new
it’s not new
it does not create value
it creates value
Innovationcreativity
improvementwaste of time
Why innovate?
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"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."
Charles Darwin
Why now?
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2nd Industrial Revolution(1870 -1914)
• Electricity• Mass production• Light bulb• Telephone
• Combustion engine
1st Industrial Revolution(1760 -1840)
• Steam engine• Advances in the steel
and textile industry
3rd Industrial Revolution(1980 - today)
• Digitalization• Computer• Internet• Robotics
• Mobil phone• Biotechnology
4th Industrial Revolution(2000 - today)
• Connectivity• Artificial Intelligence (AI)• Internet of things (IoT)• Smart phone
• Block chain /Cryptocurrencies
Breakthrough innovations driven by technology surge at a unprecendented rate
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0,1 212
47
163
2005 2010 2015 2020 2025
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15
30
75
2005 2010 2015 2020 2025
Data volume created by the worldZettabytes (zb = 1021 Bytes)
Number of connected devices (IoT)Billions
The necessary volume to store all speech ever spoken is 42 zB
Three principle sources of breakthrough/disruptive technologies
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Digital
BiotechnologyMaterialsExamples:Bio synthetics GenomicsDNA Editing
Examples:Artificial IntelligenceSensors/ IoTBlockchain / Crypto currencies
ExamplesEnergy-/Information-Storage 3D PrintingNano technology
Companies do not necessarily need to develop new technology, but monitor its evolution, evaluate its potential and learn tom use it
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Quantum computingVolumetric Displays
Brain-Computer Interface
Conversational UserInterfaces
Enterprise Taxonomy and Ontology Managment
Software-DefinedSecurity
InventionPeak of
expectation Disillusion Rising maturity Plateau of productivity
Expectation
Time
Virtual Reality
Augmented Reality
Cognitive Expert Advisors
Commercial UAVs (Drones)
BlockchainCognitive Computing
Nanotube ElectronicsAutonomus Vehicles
Machine LearningDeep Learning
Connected home
Smart Dust
4D PrintingArtificial GeneralIntelligence
NeuromorphicHardwareDeep
ReinforcementLearning
Human Augmentation
5GServeless Pass
Digital twin
Smart WorkspaceAugmented Data Discovery
Edge ComputingSmart Robot
IoT Plataform
Virtual Assistants
Ciclo de Gartner para Tecnologias Digitais Emergentes, 2018
Time to adoptionLess than 2 years2 to 5 years5 to 10 yearsmore than 10 years
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old world new worldAssets • Owner uses assets (Wal-Mart)
• Focus on products • Economies of scale as principal
source of competitive advantage
• Companies and consumers control assets through platforms without being their owner (Uber, Airbnb, Alibaba, Spotify, Car2go)
• Digital manufacturing allows to produce small quantities at low costs (3D printing)
Information • Compromise between “richness and reach”(libraries, schools , shops)
• Unlimited, immediate and direct access (distant learning, virtual assistance, Big data, Big data, Cloud, sensors, analytics)
Computation • Scarce and expensive resource • Used for routine automation
• Ubiquitous , approaching zero costs• Substituting intelligent labor (Watson)
Crowds • Closed communities • Intermediaries (banks, agents)
• Open communities (R&D financing)• Direct interactions/transactions (Bitcoin)
Digital technologies create structural change in the economy and will impact every business in the future
Companies, by nature, are not good innovators
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Companies:• Generate and enforce rules• Prefer the status quo• Minimize risks
Innovations: • Break rules• Challenge the status quo• Assume taking risks
Results: • 2nd industrial revolution: Electrification caused a mass extinction of industrial companies in the early 20th century• 3rd and 4th industrial revolution: 52% of companies in the S&P 500 in the year 2000 do no longer exist
Examples: • Nokia did not believe ion the smartphone • Kodak did not believe in digital photography • Blockbuster did not believe in Netflix
The strategic environment for innovation is different from those of established businesses and require a different approaches
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Predictability of the
environment
high
low
low high
1. analyze
2. plan
3. execute
1. envision
2. build
3. persist
Classic
Adaptative
Visionary
Malleable
1. experiment
3. scale 2. select
1. engage
3. evolve 2. orchestrate
“Be big!” “Be the first!”
“Be fast!” “Be an o orchestrator”
Typical environment for innovation
Malleability of the environment
Companies should develop a dynamic portfolio of innovation initiatives and manage them like a venture capital firm
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Ideas(innovation cell)
Business plan Businessbuild
Revenue and profit target
CEO/CIO/Board
Select Select
Scale up
experiment
Select Select
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Is it real?
Is it worthit?
Is the Market size realistic?
Can the product real be made?
Is the product competitive?
Is our company competitive?
Does the value creation potential justify the risk?
Is the initiative compatible with our strategy ?
Can wewin?
As long as there are no reliable financial performance estimates initiatives can beevaluated through three perspectives
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Prod
uct/
tech
nolo
gy
The same as the existing
Similar tothe existing
Different from the existing
The same asthe existing
Similar to the existing
Different from the existing
Target market
Value potential
X% probability of failure
20-40%
40-60%
60-80%
80-100%
The portfolio should be balanced in risk and size of the initiatives
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CIO
How to organize? –Structual elements that can help
Innovation Cells:
• Interdisciplinary teams that work on an initiative as if it were a Start-up within the company. Every cell with an entrepreneurial leader that knows how to communicate and to build relations.
• Working below or parallel to the existing organizational structure, depending on the necessary level of protection, however, not isolated from the resources and competencies of the company.
Chief Innovation Officer:
• Owns the innovation portfolio
• Identifies trends and opportunities for the existing businesses, e.g. in external Start-ups
• Facilitates the incubation process
• Reports to the CEO or Supervisory Board
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People – behind every innovation there are individuals committed to the systematic search for new
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M&A, Private Equity
Venture Capital/Corp. VC
Aceleradora
Incubadora
Co-Working
person à company Proof of Concept
Company 1st CustomerProof of Value
Company Many customers Business Model
ConsolidatedBusiness Model
Type of company
Mat
urity
of th
e com
pany
+
-person
Break-even
In addition to internal initiatives, companies should leverage external sources of innovation
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1013
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3432
38
2012 2013 2014 2015 2016 2017
CAGR 30%
Global investment in corporate venture capital has been increasing steadily
Example of a Start-up map: 338 Start-ups in the Agro Business in Brazil
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Upstream On the farm Downstream
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Innovation cells
Own Startups
Other Startups/ VC activities/
Incubators
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3
Control and management of the Startups
Existing Businesses
New Businesses
1 New products and servicesPartnerships
What Boards can do
Investments in technologies of interest
• Mandate that executives deal with disruptive technologies
• Put the innovation portfolio on the board agenda
• Pay attention to talents
• Have a CIO, when necessary reporting directly to the board
• Dedicate resources to be invested in Startups or external innovation
• Have board members that are “literate” in innovation and new technologies
It is important that the supervisory board also puts innovation on the agenda
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Identification of relevant technologiesand an approach for their adoption
Develop a plan for transformation
Implementation of the transformation plan
2 31Discover DeliverDesign
How does a typical project for Innovation look like?
Analyze the status quo with respect to innovation in the organization
Identify and prioritize disruptive Technologies of Business models that offer opportunities or pose threats to the existing businesses ( “Triage”)
Map relevant start ups for your business
Define a portfolio of innovation initiatives:• Prioritized technologies and/or
business models • Objectives, timelines
Define possible changes in management and governance to manage the innovation portfolio:• Leaders, talent• Structures, processes
Implement structural changes ( e.g. creation of the position of CIO, participation in incubators, etc.)
Start the internal initiatives and possibly acquire start-up of interest
Exercise the governance of innovation at the highest executive level and in the supervisory board
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Conclusions
The supervisory board can be a catalyzer for innovation, bringing attention to the subject and dedicating resources.
All businesses will be transformed by new, disruptive Technologies. The only question is, when and how?
To innovate the company does not to be a technology leader, but explore the possibilities that new technologies offer.
In order to become more innovative, it may make sense to jump-start the process with a project to triage opportunities and create an initial portfolio of innovation initiatives.