Systematic Business

Innovation

?

JosephSchumpeter

“Creative Destruction…

incessantly revolutionizes the

economic structure from

within, incessantly destroying

the old one, incessantly

creating a new one.”

Creative Destruction

is the essential fact about capitalism

It is what every capitalist concern

has got to live in

Creative Destruction

generates amazing

opportunities

That’s why it’s so powerful

and why it’s so relevant

They haven’t taken on board his distinction between Invention and InnovationINVENTION INNOVATION

This should be as demanding and exciting as inventing the thing you do.

Every aspect of it

An entrepreneur also innovates the entire business that creates &

delivers the new thing they do

When you

Invent and Innovate

it can produce

extraordinary success

But that’s not what most people do

‘Flat’ StructurePoor Management Information

Short-Term OutlookUnstructured Communications

Overworked & stressed founder/s

Systematic

Business

Innovation

A Business is a System

“A set of interacting or

interdependent components forming an

integrated whole”

“A set of interacting or

interdependent components forming an

integrated whole”

Product/Service

Process/ Workflow

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

Structure

Product/Service

Process/ Workflow

Structure

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

How do you grow a

business in a Systematic

way?

every detail, every element

must be building towards your

ultimate Vision

It’s like directing a film:

You need two

‘heads’

Invent your

product+

Innovate your

business

But what do you actually

DO?

You need some simple practical tools to help you:

a) think about your business as a system

b) design it systematically

THE NEW THING THAT YOU DO

BUSINESS ENGINE

BUSINESS STRATEGY

BUSINESS ENGINE

BUSINESS STRATEGY

THE NEW THING THAT YOU DOProduct/Service

Process/ Workflow

Business Model

Marketing

Structure

Leadership/ Management

People/ Skills

Net Profits

Turnover/ Sales

THE NEW THING THAT YOU DO

BUSINESS ENGINE

BUSINESS STRATEGY

OPERATIONAL COMPETENCE

= the skills to execute on

The New Thing That You Do (The Invention)

Business Strategy isn’t developed

Business Engine is neglected

Filling The Gap• ‘Consultants’

• Your Accountant

•Generic Business Coaches

•Making It Up As You Go

Start-up Grow-upStay-up

•You’re drowning in paperwork -

especially financial

•Quality of work is starting to slip

•Cash flow is bumpy

•Gaps appear in communications

•Team morale is not so great

•You feel overworked & stressed

10/12 30/35

Lessons:

•Understand which stage you are in

•Look out for ‘transition symptoms’

•Design/re-design your business

system for the next stage

DO THIS CONTINUOUSLY

THE NEW THING THAT

YOU DO (Product/Service)

Process/ Workflow

Structure

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

Product/Service

Process/ Workflow

Structure

Leadership/ Management

Business Model

People/ Skills

Marketing

Turnover/ Sales

Net Profits

Q1 Q1Q4 Q4Q2 Q3Q3Q2

How you can use a bookcase to help turn your Systematic Business Innovation into an Action Plan

Example: an early-stage online jewellery business that is growing fast

& sees opportunities for it’s own e-commerce operation, partnering with the big online retailers and opening

operations in China

Q1 Q1Q4 Q4Q2 Q3Q3Q2

People/ Skills

Product/ Service

Process/ Workflow

Structure

Business Model

Leadership/ Management

Marketing

Turnover/ Sales 1.5m

Net Profits 150K

Full-time MD

Free up MD 50%

Shanghai Warehouse

Bespoke Service

Multiple rev streams

Team = 15 people

Open in China

YEAR

1

YEAR

2

Q1 Q1Q4 Q4Q2 Q3Q3Q2

People/ Skills

Product/ Service

Process/ Workflow

Structure

Business Model

Leadership/ Management

Open in China

Turnover/ Sales 1.5m

Mgmt team

Net Profits 150K

Full-time MD

750K 1m 1.35m1.25m1.1m800K 900K

Shanghai Warehouse

Bespoke Service

Team = 15 people

Multiple rev streams

Marketing

Q1 Q1Q4 Q4Q2 Q3Q3Q2

People/ Skills

Product/ Service

Process/ Workflow

Structure

Business Model

Leadership/ Management

Open in China

Turnover/ Sales 1.5m

Mgmt team

Net Profits 150K

Full-time MD

750K 1m 1.35m1.25m1.1m800K 900K

Shanghai Warehouse

Bespoke Service

Multiple rev streams

Team: 6 Hire studio assistant

Hire designer

Hire sales/account mgr

Hire Shanghai head

Team = 15 people

Promote Ben to MD

Mgmt training Ben

Ben: build mgmt team

Ben: build mgmt team

Marketing

Q1 Q1Q4 Q4Q2 Q3Q3Q2

People/ Skills

Product/ Service

Process/ Workflow

Structure

Business Model

Leadership/ Management

Open in China

Turnover/ Sales 1.5m

Mgmt team

Net Profits 150K

Full-time MD

750K 1m 1.35m1.25m1.1m800K 900K

Shanghai Warehouse

Bespoke Service

Multiple rev streams

Team = 15 people

Team: 6 Hire studio assistant

Hire designer

Hire sales/account mgr

Hire Shanghai head

Promote Ben to MD

Mgmt training Ben

Ben: build mgmt team

Ben: build mgmt team

Own e-commerce

3rd party sites

Open key accounts:

Amazon, Net-a-Porter

Marketing

Q1 Q1Q4 Q4Q2 Q3Q3Q2

People/ Skills Team: 6Hire studio assistant

750K 1m

Product/ Service

Process/ Workflow

Structure

Business Model

Leadership/ Management

Hire designer

Hire sales/account mgr

Hire Shanghai head

Ben: build mgmt team

Free up MD 25%

Free up MD 50%

Prep Shanghai

Open Shanghai

Ben: build mgmt team

Shanghai research

Revamp Website

Own e-commerce

3rd party sites

Open key accounts:

Amazon, Net-a-Porter

Multiple rev streams

Promote Ben to MD

(too?) flat

Turnover/ Sales 1.5m1.35m1.25m1.1m800K 900K

Shanghai products

Shanghai products

E-commerce range

Mgmt training Ben

Promote Ben to MD

3 x Board meetings

Net Profits 94K 100K 126K 150K 150K165K 188K 169K

Shanghai Warehouse

Bespoke Service

Full-time MD

Team = 15 people

Marketing

Don’t crash your business because you think any fool can run one…

Invent and Innovate!