briefing innovation compass (by guy bauwen)
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Copyright Dr. Guy Bauwen - 2012 19-9-2012 1
Innovation Compass
How to develop a market and build
a successful business
iLab Turning innovation into business
Prof. Dr. Guy Bauwen
Director Knowledge Center
Entrepreneurship & Business Innovation
Rotterdam University of Applied Sciences
Rotterdam, September 18, 2012 [email protected]
Copyright Dr. Guy Bauwen - 2012 19-9-2012 2
International
Entrepreneurship Innovation
Marketing
Finance Creativity
Attitudes &
Talent
Labor
Practices
Knowledge
Center
Entrepreneurship
& Business
Innovation
Major activities:
1. Knowledge Development.
2. Knowledge transfer.
3. Knowledge dissemination.
4. Knowledge valorization.
5. Knowledge Funding.
Innovation Compass: Knowledge Center Entrepreneurship &
Business Innovation
A strong team of proven academic and business domain experts.
Relevant & rigor research projects in collaboration with educators & students
9/19/2012 © Bauwen Consulting - 2011.
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© Bauwen Consulting - 2011.
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3
Fuzzy
Front
End
End
Game
①
Filter
②
Develop
③
Grow
④
Manage
1 2 3 4
Upstream: ideation, filtering, incubation, new product development are critical.
Downstream: introducing, accelerating, managing & pruning are important stages.
Research domain: the innovation life cycle.
Innovation Compass: Knowledge Center Entrepreneurship &
Business Innovation
Copyright Dr. Guy Bauwen - 2012 19-9-2012 4
• Why is the growth race into new territory
for new ventures so challenging?
• How do most new ventures confront the
brutal external and internal realities?
• Why fail most new ventures to deliver the
desired and expected outcome?
• How can new ventures influence their
destiny and reach their destination?
• Which diagnostics, tools & techniques
can new ventures use to succeed?
Organisation
Entrepreneurship
Marketing
Sales
Innovation
Strategy
Innovation Compass: Challenges that will be addressed
Innovation and entrepreneurship are on top of the agenda … Why is the
mortality rate so high? What can we learn from successes & disasters?
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Not satisfied with
innovation measurements
Time-to-Volume
not monitored Not satisfied & underperform
at the commercialisation stage
60%
40%
Commercialisation not a regular
leadership subject
Absence of formal processes
ad-hoc decisions
Some facts and figures:
90%
10%
67%
33%
68%
32%
56%
44%
Innovation Compass
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• External view
• Five forces: industry attractiveness Industry
Attractiveness
• Internal view & uniquenes
• Resources, processes, values
Resource Based View
• Complement your resources
• Leverage external resources Resource
Dependency View
• Adapt to the environment
• Adaptability & agility & alignment Dynamic
Capabilities
• The sky the limit
• Stretch & go for it Strategic Intent
Innovation Compass: Which lenses do you use?
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Understanding the
battlefield & the context
Market dynamics
Competitive positions &
moves
Translating
strategies in actions
Blueprint for action
Monitoring key
indicators
Assessing alternatives
for the company,
customers, strategies
Determining objectives
& goals
Part 1
Part 2
Planning Overview
Innovation Compass: Market Development Models
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Time
Desired
Outcome
Vision
Mission
Strategy
External forces
Internal forces
Barriers
Drivers
Threats
Opportunities
Strenghts
Weaknesses
Goals Intent
Resources
Processes
Values 1
2
3
Innovation Compass: Market Development Models
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Connecting Sensing
Screening
Speed of
Decision Making
Scaling
Stretching
Seizing
Synchronizing
Internally / Externally
Strategic
Intent
Ambidextrous
Monitoring & Measuring
Innovation Compass: Diamonds of success
Sensing (Connecting)
Capabilities
Copyright Dr. Guy Bauwen - 2012 19-9-2012 10
o Seeing/Listening: have antennas in position;
continuously explore external and internal opportunities.
o Filtering/Interpreting: filter your knowledge, make
choices, determine priorities, take actions.
o Decision making speed: act with agility = adaptability
+ speed and execute as a laser beam.
“Our approach for capturing insights was inadequate for
embryonic markets” Core Routing Manager
“Sensing requires you are open to the world ... You don’t wait until
opportunities come to you”
Sensing is about identifying new growth opportunities,
selecting targets, and acting with agility & anticipating.
Scaling (Shaping) Capabilities
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o Scaling right: is about tailoring and bundling your
offering and determining your positioning.
o Scaling down: is about modularizing, simplifying
and optimizing the time to close your orders.
o Scaling up: is about serving demand directly and
indirectly influencing the way the market develops.
Scaling is tailoring and modularizing offerings and influencing
the way the market develops
Shaping
Growth is oxigen
“Be enthusiastic, show passion, but remain with both
feet on the ground”.
“In the battlefield there is no time for learning and watching, but for
the right and the fastest execution”
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o Screening: assess fit and attractiveness of
existing and new partners.
o Selecting: make sure the right partners are
chosen and the right mix of partners are active.
o Sharing: walk the talk and exchange
knowledge.
“If I could go back in time, I would definitely evaluate,
select much faster strategic partnerships, decide with
a sense of urgency”.
Collaborating Capabilities
“Don’t just relate … Collaborate“.
Collaborating starts by assessing and selecting the right
partner at the right time and do the right things.
Copyright Dr. Guy Bauwen - 2012 19-9-2012 13
o Seizing: making the right decisions and executing
with discipline.
o Spearheading: getting the time to close an order
under control, to keep promises.
o Synchronizing: make sure the organization is
operationally in line with the market.
“As long as you have not elevated the discussion to a higher level of
business talk, you remain in the technical doldrums”.
Capturing (Seizing) Capabilities
“Measurements drive management decisions & actions”.
Seizing capabilities is about making the right decisions and
executing with discipline
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o Mobilizing: energizing & motivating the
stakeholders to move ahead.
o Strategic conflict & dialogues: using constructive
conflict to navigate thru any situation.
o Dynamic stability & ambidexterity: being real
time aligned with the environment.
“People who lead frequently bear scars from their efforts to bring about
adaptive change. Often they are silenced. On occasion they are killed.”.
Leading Capabilities
“Achievers ignore the boundaries of the old and have the courage to
explore the new”
Leading capabilities are ambidexterous, are able to confront
constructive conflicts & leverage dialogues
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Lessons for young entrepreneurs
1. Limited business opportunities. Not every good idea can become a great business. Just
because you passionately believe that your product or service is great, and everyone needs it,
doesn’t mean that everyone will buy it. There is no substitute for market research.
2. No written plan. Don’t believe the myth that a business plan isn’t worth the effort. The
discipline of writing down a plan is the best way to make sure you actually understand how to
transform your idea into a business.
3. No revenue model. Even a non-profit has to generate revenue to offset operating costs. If
your product is free, or you lose money on every sale, it’s hard to make it up in volume. If your
customers have no money, your business won’t last long.
4. No intellectual property. If you expect to seek investors, or you expect to have a
sustainable competitive advantage against giants in your industry, you need to register for
patents, trademarks and copyrights, as well as enlist non-compete and non-disclosure
agreements to protect trade secrets. Intellectual property is also often the largest element of
early-stage company valuations for professional investors.
5. Too much competition. Having no competitors is a red flag - it may mean there’s no market
- but finding ten or more with a simple Google search means your area of interest may be a
crowded. Remember, sleeping giants can wake up. So, don’t assume that Microsoft or Procter &
Gamble are too big and slow for you to worry about.
Innovation Compass: Top Reasons Why First-Time Entrepreneurs Fail
Source: Martin Zwilling, Entrepreneur, September 15, 2012.
Copyright Dr. Guy Bauwen - 2012 19-9-2012 16
Lessons for young entrepreneurs
1. Can’t execute. When young entrepreneurs come to me with that “million dollar idea,” I have to
tell them that an idea alone is really worth nothing. It’s all about the execution. If you’re not
comfortable making hard decisions and taking risks, you won’t do well in this role.
2. An inexperienced team. In reality, investors fund people, not ideas. They look for people
with real experience in the business domain of the startup, and people with real experience
running a startup. If this is your first time around, find a partner who has “been there and done
that” to balance your passion and bring experience to the team.
3. Underestimating resource requirements. A major resource is cash funding, but other
resources, such as industry contacts and access to marketing channels may be more important
for certain products. Having too much cash, not managed wisely, can be just as devastating as
too little cash. Don’t quit your day job until new revenue is flowing.
4. Not enough marketing. Having a slick word-of-mouth marketing strategy isn’t enough to
make your product and brand visible in the relentless onslaught of new media out there today.
Even viral marketing costs real money and time. Without effective and innovative marketing
across the range of media, you won’t have customers - or a business.
5. Giving in too early. The most common cause of startup failure is the entrepreneur just gets
tired, gives up and shuts down the company. Despite setbacks, many successful entrepreneurs
like Steve Jobs and Thomas Edison kept their vision until they found success.
Innovation Compass: Top Reasons Why First-Time Entrepreneurs Fail
Source: Martin Zwilling, Entrepreneur, September 15, 2012.