Scrum Alliance Future of Innovation FINAL · ©IMD$2016 (200512013):)Zero)Distance)To)Customer)–...

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The Future Of Innovation: Making it real & personal Bill Fischer February 24, 2016

Transcript of Scrum Alliance Future of Innovation FINAL · ©IMD$2016 (200512013):)Zero)Distance)To)Customer)–...

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The  Future  Of  Innovation:Making  it  real  &  personal

Bill  Fischer

February  24,  2016

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• Bill  Fischer  is  Professor  of  Innovation  Management  at  IMD.  He  co-­founded  and  co-­directs  the  IMD  program  on  Driving  Strategic  Innovation,  in  cooperation  with  the  Sloan  School  of  Management  at  MIT  and  also  authors  a  regular  column  for  Forbes.com  entitled  “The  Ideas  Business,”

• Steve  Denning  is  a  board  member  of  Scrum  Alliance.  He  led  the  Learning  Consortium  in  2015.  He  writes  for  Forbes.com  and  is  the  author  of  eight  books,  including  The  Leader’s  Guide  To  Radical  Management  (2010)  and  The  Leader’s  Guide  To  Storytelling (2010).

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Who  is  presenting  today?

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Innovation,  Agile  and  Scrum

• Software  development  is  inherently  about  innovation• “Software  is  eating  the  world.”  

Marc  Andreessen• All  organizations  are  now  software  organizations• Innovation  is  the  key  to  the  future  of  all  organizations

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The  organization  I  work  for  is  very  innovative.  

Yes

No

Not  relevant/not  sure  

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Poll

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©  2015  IMD  – International  Institute  for  Management  Development.  Not  to  be  used  or  reproduced  without  permission.

The  Future  of  InnovationTwitter:  @bill_fischer

www.fischerideas.com

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The  Future  of  innovation

Innovative  organizations  deserve  innovative  leadersIs  not  about  so  much  about  new  products…nor  new  processes

It’s  more  about  business  models  &  organization

&  Leadership!!

As  seen  in  the  IMD-­MIT/Sloan  Driving  Strategic  Innovation  program:  

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The  Last  Innovation  Frontier

Leadership  behavior!!

If  we  can’t  create  organizations  whereinnovation  is  part  of  what  everyoneregards  as  their  responsibility

we  will  miss  significant        opportunities!

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We  need  to  think  differently  about  moving  into  the  future:

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Innovation  as  a  verb,  not  a  noun!

&  everyone  involved!

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Here  are  my  beliefs  on  what  the  Leadership  of    Innovation  in  the  Future  will  look  like:  

vCustomer  Experience  is  the  beginning  for  every  conversation!  

vAnticipatory rather  than  Reactive  vContinuous not  Episodic  vMore  involved  with  the  Unknown than  the  Uncertain  – exploring:    lots  of  small  bets!

vOpen  &  Inclusive  rather  than  protective  &  solitary

vDigital (not  analog)  leadership  behaviors  

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Let  me  show  you  a  traditional  company  in  an  old-­economy,  commodity  industry  that  is  practicing  these  very  behaviors

They  believe  that  their  ultimate  advantage  is  not  lower  costs,  but  the  knowledge  that  they  have  – if  only  they  can  release  it!  – so,  this  is  about  creating  a  smarter firm!

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Haier

vOne  of  China’s  big  3  global  brandsvHas  reinvented  itself  3x  in  3  decadesv80,000  peoplev&  comes  out  of  Confucian/former  centrally  planned  emerging  market  

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They  recognize  that  external  change  is  continuous

Innovation  is  marked  by  successive  generations  of  new  ideaswhich  disrupt  the  old  ideas

Custom

er  Desire

sIndustry  Evolution

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&  that  message  is  shared  with  everyone  so  that  everyone  realizes  that  change  never  ceases

Jin  Xing,  Equipment  Parts  Department  

Ri  Xin,  Refrigerator  Products  Department  

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Innovation  is  More  Than  Technology  &  Products

Copyright  Alexander  Osterwalder&  Yves  Pigneur,  Business  Model  Generation

Where  should  we  start?

Innovation  can  start  anywhere….  we  can  all  be  innovators!

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Copyright   Alexander   Osterwalder   &  Yves  Pigneur,   Business   Model  Generation

Customer-­centricity  &  business  model  innovation  arekey  for  driving  change  at  Haier

1984:    to  build  better  products  and  gain  brand  recognition  as  a  result

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(1984-­‐1991):  Brand  Building  through  Focusing  On  Quality  &  Manufacturing  Excellence

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The  Star  Model: what  managerial  choices  are  you  making  to  affect  behavior?

Source:    Jay  R.  Galbraith,  Designing   Organizations: An  Executive  Briefing   on  Strategy,  Structure,  and  Process    (San  Francisco:    Jossey-­Bass,  1995),   adapted   by  Bill   Fischer

VisionStrategy

Market DirectionCompetitive Advantage

Skills & TalentStaffing and Selection

Performance FeedbackLearning and Development

How We OrganizePower and Authority

Reporting RelationshipsOrganizational Roles

Values, Measures & RewardsGoals, Scorecards and Metrics

Values and BehaviorsCompensation/Rewards

How We WorkNetworks, Processes,Teams,

Integrative Roles, Matrix StructuresIDEA – Knowledge Flow

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Business  Model  Innovation  Must  be  Reinforced  by  Organizational  Culture  

Started  with  an  inheritedworkforce,  with  no  workethic

Visionary  Value  PropositionQuality  à Brand

Daily  measurements  to  daily  account  for  Performance  &  quality

Tied  wages  directly  to  the  performance  measurement  process  

Strong  top-­down  leadershipEveryone  is  in  the  reportingprocess…  start  to  attackhierarchy

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Along  the  way  (1998)  Haier  chose  to  Become  a  Service  Company

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Market  Chains  – the  power  of  pull  Another  Visionary  Value  Proposition

Moving  from  Products  to  Service  Responsiveness

Same  workforce  but  now  with  confidence  in  

ZRM

Performance  measurementprocesses  built  upon

OECwith  some  slightmodifications

Abolition  of  functionalhierarchical

reporting  – emphasison  market  linkages

Rewards  based  onMarket  linkages  &  individual   performance

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Then,  in  2005,  they  chose  to  create  an  organization  that  moved  from  responsiveness  to  intimacy  

Zero-­distance  with  the  customer!

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Zero-­distance  with  the  customer

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Zero-­‐Distance  Inverted  Pyramid  

ZZJYT

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(2005-­‐2013):  Zero  Distance  To  Customer  – From  Responsiveness  to  Intimacy

ZZJYTs

Create PullMechanismsIn Channels

Real Market

Segmentation based on more

knowledge

Additional Revenues from

New Brands

Personalized offerings in real

time at affordable price

Immediate downstream presence via

B2B companies

additional  revenues  from  customized  service  

Reduced Administrative costs via ZZJYTs

Increased reliance on

external experts

Creation of GoodayLogistics

Partnering with other appliance

makers via GoodayLogistics

B2B companies with

downstream partners

Entrepreneurial workers

Zero-Distanceto

Customers

Reduced Inventory Costs

additional  revenues  as  retail  service  provider

Internet skills

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Zero  Distance  To  the  CustomerAnother  Visionary  Value  Proposition

Moving  beyond  Responsiveness   to  intimacy

Begin  to  hire  for  new  skills&  people  looking  for  freedom

Creating  of  self-­organizingCompetitive  work  units

Everything  is  up  for  bids&  is  competitive

Everything  is  performancebased

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Do  you  see:

vOpenness?

vRestlessness?

vCoherence?

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Poll:  Which  of  these  do  you  see  in  your  own  organizations?

vOpenness?

vRestlessness?

vCoherence?

Check  all  that  apply!

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Results  2014

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5  Lessons  of  Haier’s  Innovativeness  

1. Successful  transformational  innovation  has  a  higher  probability  of  success  if  it  occurs  before  the  time  that  it  is  necessary

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5  Lessons  of  Haier’s  Reinvention

1. Successful  reinvention  has  a  higher  probability  of  success  if  it  occurs  before  the  time  that  it  is  necessary

2. Revolution  through  accretion  – building  on  the  familiar

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Haier  never  jumped  “into  the  unknown”

Markets

Distinctive  Competencies

New

Existing

Existing

New

Source:    Chakravarthy  &  Lorange

Protect  &  Extend

TransformLeverage

Build

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5  Lessons  of  Haier’s  Reinvention

1. Successful  transformational  innovation  has  a  higher  probability  of  success  if  it  occurs  before  the  time  that  it  is  necessary

2. Revolution  through  accretion  3. When  it  comes  to  creating  a  culture  of  

widespread  innovation,  fewer  ideas  are  better§ Customer  centricity§ The  principle  asset  of  the  firm  is  its  talent

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5  Lessons  of  Haier’s  Reinvention

1. Successful  transformational  innovation  has  a  higher  probability  of  success  if  it  occurs  before  the  time  that  it  is  necessary

2. Revolution  through  accretion  3. When  it  comes  to  creating  a  culture  of  

widespread  innovation,  fewer  ideas  are  better4. Successful  innovation  =  dreams  +  details

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1. Successful  transformational  innovation  has  a  higher  probability  of  success  if  it  occurs  before  the  time  that  it  is  necessary

2. Revolution  through  accretion  3. When  it  comes  to  creating  a  culture  of  

widespread  innovation,  fewer  ideas  are  better4. Successful  innovation  =  dreams  +  details5. Visionary  leadership  is  key  to  all  of  this

5  Lessons  of  “Big-­‐Bang” Reinvention

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What’s  Next    in  Haier’s  Reinvention  Journey

An  organization  without  boundaries  (a  platform)

Zhang  Ruimin argues  that  there  are  at  least  four  big  changes  todayoccurring  outside  of  Haier,  that  Haier  must  adjust  to:

• Asset  access  >  Ownership• What  you  know  >  What  you  make• We  are  all  living  our  private  lives  in  internet  time,  but  not  our  

organizational  lives• We  live  in  a  world  of  endless  &  abundant  interconnectivity

As  a  result,  organizations  should  pursue:• Speed• Openness• Boundarylessness• Value-­ecosystem  opportunity

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One  way  to  achieve  this  is  organizational  innovation

To  move  from  the  traditional  wayof  thinking  about  an  organization(which  Haier  had  abandoned  some  time  ago)

&  to  think  of  an  organization  thatwould  be  fast,  open,  without  boundaries  &  which  would  createopportunities  for  its  eco-­systempartners

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Copyright   Alexander   Osterwalder   &  Yves  Pigneur,   Business   Model  Generation

This,  once  again,  involves  building  new  business  model  for  Haier

Leveragewhat  youhave  toseek  newopportunities

&not  be

hostage  tolegacy

Best  Logisticssystem

Openness&

SpeedNew  Partners

• Fisher  &  Paykell• Sharp

• GE  Appliances  

Boundaryless

DeHaierization

EntrepreneurialWorkersZZJYTs

New  Customers

In  ManyNew

markets

Revenue  Growth&  new  revenue  sourcesCost  Reduction

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Think  About  How  Haier  is  Living  Each  of  These:  

vCustomer  Experience  is  the  beginning  for  everything!  

vAnticipatory rather  than  Reactive  vContinuous not  Episodic  vMore  involved  with  the  Unknown than  the  Uncertain  – exploring:    lots  of  small  bets!

vOpen  &  Inclusive  rather  than  protective  &  solitary

vDigital (not  analog)  leadership  behaviors  

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Poll:  Which  of  these  characterizes  your  organization?  

§ Customer  Experience  is  beginning  for  everything!  

§ Anticipatory  rather  than  Reactive  § Continuous  not  Episodic  § More  involved  with  the  Unknown  than  the  Uncertain  – exploring:   lots  of  small  bets!§ Open  &  Inclusive  rather  than  protective  &  solitary

§ Digital  (not  analog) leadership  behaviors  

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Incidentally,  This  Reminds  Me  of  Three  Things  That  They  Never  Teach  You  About  Change  Leadership

Be  immodestBe  impoliteBe  unreasonable

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Questions?

Questions?

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Thank  You  For  Your  Interest  

The  conversation  is  continued  at:§@bill_fischer§www.fischerideas.com

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Wednesday  March  16,  at  11am  ET

Joel  Semeniuk

What  is  a  Culture  of  Innovation  and  How  Do  You  Get  It?

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February  24,  2016

The  Future  Of  InnovationBill  Fischer