Dealing_with_Darwin_for_Press_10_24

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Education

Published on January 9, 2009

Author: aSGuest9809

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Dealing with DarwinHow Great Companies Innovate at Every Phase of Their Evolutionwww.dealingwithdarwin.com : Dealing with DarwinHow Great Companies Innovate at Every Phase of Their Evolutionwww.dealingwithdarwin.com Geoffrey Moore Managing Partner The Set Up : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 The Set Up Why Darwin? Influx of offshore competition and new market formation Natural selection is driving to survival-of-the-fittest outcomes Enterprises must differentiate to gain competitive advantage The Problem Enterprises spend heavily on innovation for competitive advantage Not enough to competitive advantage to show for it (commoditization) High failure rates signal a need for better mental models Crossing the Chasm, Inside the Tornado, The Gorilla Game Dealing with Darwin Better mental models for managing innovation and inertia Best practices based on new models Showcase Cisco as a case study Return on Innovation : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Return on Innovation Waste: Innovation projects that fail to create definitive separation from competitive offerings: Not going far enough in the right direction Innovation’s LandscapeThe Category Maturity Life Cycle : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Time Revenue Growth Technology Adoption Life Cycle Early Main Street Mature Main Street Declining Main Street End of Life A D C B Innovation’s LandscapeThe Category Maturity Life Cycle Broad Universe of Innovation TypesDifferent Types Get Traction at Different Points : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Disruptive Innovation Application Innovation Product Innovation Platform Innovation Enhancement Innovation Integration Innovation Experiential Innovation Process Innovation Marketing Innovation Broad Universe of Innovation TypesDifferent Types Get Traction at Different Points Value Migration Innovation Line Extension Innovation Value Engineering Innovation Harvest & Exit Managing InnovationFour Innovation Zones : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Managing InnovationFour Innovation Zones Product Leadership Zone Operational Excellence Zone Customer Intimacy Zone Value Renewal Zone Innovating for Growth MarketsThe Product Leadership Zone : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Innovating for Growth MarketsThe Product Leadership Zone Disruptive Innovation Application Innovation Product Innovation Platform Innovation Enterprise: Genentech (recombinant DNA) Consumer: Skype (VOIP) Enterprise: Landmark (3-D seismic interpretation) Consumer: Amazon (Internet retailing) Enterprise: Cisco (Internet routers) Consumer: Cuisinart (food processors) Enterprise: Oracle (relational databases) Consumer: Sony (game machines) Return on innovation requires differentiation All these companies achieved separation from their competition Innovation Types for Mature MarketsThe Customer Intimacy Zone : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Innovation Types for Mature MarketsThe Customer Intimacy Zone Experiential Innovation Line Extension Innovation Enhancement Innovation Marketing Innovation Enterprise: Cognos (executive dashboards) Consumer: Swatch (fashion watches) Enterprise: McKinsey (relationship marketing) Consumer: Mattel (American Girl franchise) Enterprise: World Economic Forum (Davos) Consumer: Disney (theme parks) Enterprise: Boeing (737 line of aircraft) Consumer: Yahoo (internet portal services) Return on innovation requires differentiation All these companies achieved separation from their competition Innovation Types for Mature MarketsThe Operational Excellence Zone : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Innovation Types for Mature MarketsThe Operational Excellence Zone Process Innovation Integration Innovation Value Engineering Innovation Value Migration Innovation Enterprise: Celera (shotgun genomic sequencing) Consumer: McDonald’s (fast food) Enterprise: IBM (hardware to software & services) Consumer: HP (printers to inkjet cartridges) Enterprise: SAP (Enterprise Resource Planning) Consumer: Victorinox (Swiss army knives) Enterprise: TSMC (silicon foundry) Consumer: BIC (ballpoint pens) Return on innovation requires differentiation All these companies achieved separation from their competition Innovating for Declining MarketsThe Category Renewal Zone : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Innovating for Declining MarketsThe Category Renewal Zone Organic Renewal Acquisition Renewal Harvest & Exit Enterprise: Alcatel (from switched voice to IP video) Consumer: Apple (from PCs to consumer electronics) Enterprise: EMC (from storage hardware to software) Consumer: Altria (from tobacco to food & beverage) Enterprise: AT&T (long distance telephony) Consumer: Oldsmobile (automobiles) Return on innovation requires differentiation All these companies achieved separation from competition These did not Managing InertiaThe Core/Context Analysis Framework : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Managing InertiaThe Core/Context Analysis Framework Mission Critical Process shortfall creates serious and immediate risk Non-Mission-Critical All other processes Supports change Retards change The Natural Cycle of InnovationInhale/Exhale : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 The Natural Cycle of InnovationInhale/Exhale Core Context Mission Critical Non-Mission-Critical Manage Mission-critical Processes At Scale Extract Resources To Repurpose For Core Invent Differentiated Offering Deploy Differentiation At Scale Clinging to Context Where Resources Get Stuck : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Mission Critical Non-Mission-Critical Clinging to Context Where Resources Get Stuck 2. Deploy 1. Invent 3. Manage 4. Offload Resources get stuck here Resources are added here for support Resources still get invested here But lack of resources here results in failure to deploy! 4. Onload Mission- critical risk Core Context The Six Levers ModelExtracting Resources from Mission-Critical Context : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Core Context The Six Levers ModelExtracting Resources from Mission-Critical Context Centralize. Bring operations under a single authority to reduce overhead costs and create a single decision-making authority to manage risk Standardize. Reduce the variety and variability of processes delivering similar outputs to further reduce costs and minimize risks. Modularize. Deconstruct the system into its component subsystems and standardize interfaces for future cost reductions. Optimize. Eliminate redundant steps, automate standard sequences, streamline remaining operations, substitute lower-cost components, or otherwise cost- and resource-reduce. Instrument. Characterize the remaining processes in terms of the variability of key parameters and develop monitor-and-control systems to manage their performance. Outsource. Drive processes out of the enterprise entirely to further reduce overhead, variabilize costs, and minimize future investment. Incorporate vendor use of monitor-and-control systems into Service Level Agreement. Unblocking the Flow of TalentResource Recycling Zones : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Unblocking the Flow of TalentResource Recycling Zones Work circulates clockwise People recycle counter-clockwise within zones IV III II I Three Roles for Continuous Innovation : Presentation Title © 2003, TCG Advisors LLCJanuary 9, 2009 Three Roles for Continuous Innovation Invention Zone Deployment Zone Optimization Zone Business entrepreneurs Think outside the box to create new core Program managers Think inside the box to manage mission-critical processes at scale Process optimizers Use the Six Levers to extract resources from context to repurpose for core

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