polyurethanes investing for growth with customers worldwide keith day vp global business development...

Polyurethanes Investing for Growth with Customers Worldwide

Keith DayVP Global Business DevelopmentHuntsman Polyurethanes

Lessons LearnedEstablishing an Entrepreneurial Innovation Teamin a Large Corporate Setting

Geneva Innovation ForumOctober 6, 2011


Why Listen to Me?

Since 2004 VP Business Development for Polyurethanes Division

Most of my career has been spent in roles where innovation was a constant and dominant theme to protect share and pricing to generate new business, expand customer and geographic coverage to transfer technology between regions to localise technology imported from another business

These are lessons I have learned – you need to figure out what they mean for you!


First thought to share -

…don’t take it!!

If someone offers you this role….

At least until you have had a serious discussion about

• Expectations

• Tools & Processes

• Metrics

• Communications


Setting the Scene

“What you see depends on how you see it”


What your Boss (board etc) sees is affected by where they sit

Slow

Plodding

Trapped by history


From there what does an entrepreneur look like?

Fast

Nimble

Unencumbered

“Ready, Fire, Aim!”


And what do they want from innovators?

Big Delivery

Little Spend

…Now

And great stories to tell investors


From their view these expectations are not unreasonable

Tangible Good ThingsAnd Intangible Bad Things

Attitudes

Big companies have a lot to offer….

Hunt this way!!

Risk IntoleranceSize & Inertia

….but they are organised to be really efficient at what they do today

Inappropriate Metrics


Ist Critical Learning Clarify Your Remit - Create Space for the team

“Where should we spend our time?”

Growth Options

Organic > < Step-out > < Acquisition

Customers

Ap

pli

ca

tio

ns

Modified Ansoff

70%Outside the Core

30%Support the Core

Create a stand-alone team Network / Lobby intensively for your own space Get this on paper


2nd Critical LearningBe careful what you wish for

Core Commercial Teams

Established uses Customers Pricing reference points Products Supply Chain Production assets Known competitors

Core Commercial Teams

Established uses Customers Pricing reference points Products Supply Chain Production assets Known competitors

New Business Arenas

Unknown markets Emerging applications New products Uncertain value proposition Different assets Different supply chain New competitors

New Business Arenas

Unknown markets Emerging applications New products Uncertain value proposition Different assets Different supply chain New competitors

Managing uncertainty & risk requires different skills, metrics and disciplines

A new world requires new tools…

Most of this succeeds Most of this fails


The risk is mainly around unknown marketsGet people using tools suitable for the task

Markets

Te

chn

olo

gy

Same Adjacent New

Same

Ad

jace

nt

New

25-40%

45-60%

40-50%

60-75% 75-90%

Probability of Failure

Entering new markets is riskier than introducing new technology

People

Package

Place

Product

Price

Product Marketing – 4Ps

Arena Advantage

Access Activities

Market Assessment – 4As

Which makes the ability to assess and understand new

markets critical to our success

Which makes the ability to assess and understand new

markets critical to our success

G.S. Day – Is it real? Is it worth doing? Can we win?


Where to look for the 70%?

Imagine the future

Megatrend impacts – what does it mean for us?

What can we substitute?

Demographics

Sustainability

Water

Climate Change

Do our current offers excite people we are unaware of?How do you know – don’t be arrogant – ask for help!

“Long-term growth does not come from doing the same things you did yesterday and hoping for a different result”

Why will anyone buy what I am offering?


Critical LearningGranularity NOT Averages

Industries grow at average ratesIndustries grow at average rates

Segments / sub-segments grow faster or slower than average

Segments / sub-segments grow faster or slower than average

Developing a ‘granular’ understanding of application space is criticalDeveloping a ‘granular’ understanding of application space is critical


Outside the CoreFocus on the experience, not the product

Your business model needs to be capable of delivering

the Value Proposition

What You Sell

How YouGet Paid

InfrastructureRequired

Arena Advantage

Activities Access

Existing Markets – Use 4As

Invention

Enabling(Processing)

Content(Applications)

Ecosystem

Un-metNeed

The critical bottleneck is often lack of ecosystem – not inventionsThe critical bottleneck is often lack of ecosystem – not inventions


Critical LearningCarefully negotiate any interactions with the core business(30% of resource defending the core)

Define the product line of the future Agree incremental vs. step-out elements and who does what

Formal techniques like Road-mapping

Innovation projects required to prove feasibility and achieve the needed features / functionalityProjects

Detailed technology development planning and timeframes to deliver key features

Technology

Detailed plan for key features / functionality over the time periodFeatures

(Functionality)

Detailed product planning & description.

Product range required and life cycle of individual products

Products

Main concepts to address market trends & opportunites – key parameters & timelines

Big Ideas(Concepts)

Market & Technology trends depicting future demand – including timeline

Trends

2011 -----------------------> 2016 Content

Mar

ket

Pul

lT

echn

olog

y P

ush

12

P1

P3

P2 P4

F2

F1

T2

T1

P1

P2

P4P3

Innovation projects required to prove feasibility and achieve the needed features / functionalityProjects

Detailed technology development planning and timeframes to deliver key features

Technology

Detailed plan for key features / functionality over the time periodFeatures

(Functionality)

Detailed product planning & description.

Product range required and life cycle of individual products

Products

Main concepts to address market trends & opportunites – key parameters & timelines

Big Ideas(Concepts)

Market & Technology trends depicting future demand – including timeline

Trends

2011 -----------------------> 2016 Content

Mar

ket

Pul

lT

echn

olog

y P

ush

12

P1

P3

P2P2 P4P4

F2

F1

T2

T1

P1

P2

P4P3


Managing Projects – Focus Intently On What Matters Right Now

Project Attractiveness

Stra

tegi

c G

uida

nce

Stra

tegi

c G

uida

nce

Idea Phase

Market(pull)

Technology (push)

MegaTrends

BrainStore(Ideation)

Idea Phase

Market(pull)

Technology (push)

MegaTrends


Idea

Firs

t Scr

eeni

ngId

ea F

irst S

cree

ning

Pre-Project Phase

Market & Concept Feasibility

Pre-Project Phase


Proj

ect A

sses

smen

tPr

ojec

t Ass

essm

ent

Inve

stm

ent P

lan

Inve

stm

ent P

lan

CommercialLaunch

CommercialLaunch

Development ProjectsDevelopment Projects

Go / No_Go

Go / No_Go

Go / No_Go

Go / No_Go

Formal Selection& Prioritisation


Building & Testing the Business CaseBuilding & Testing the Business Case

Project ManagementProject ManagementCommercialisationCommercialisation

Idea Management Idea Management

Portfolio ManagementPortfolio Management

MarketingExecutionMarketingExecution

Market FeasibilityProof of ConceptMarket FeasibilityProof of Concept

Stra

tegi

c G

uida

nce

Stra

tegi

c G

uida

nce

Idea Phase

Market(pull)

Technology (push)

MegaTrends


Idea Phase

Market(pull)

Technology (push)

MegaTrends


Idea

Firs

t Scr

eeni

ngId

ea F

irst S

cree

ning

Pre-Project Phase


Pre-Project Phase


Proj

ect A

sses

smen

tPr

ojec

t Ass

essm

ent

Inve

stm

ent P

lan

Inve

stm

ent P

lan

CommercialLaunch

CommercialLaunch

Development ProjectsDevelopment Projects

Go / No_Go

Go / No_Go

Go / No_Go

Go / No_Go



Building & Testing the Business CaseBuilding & Testing the Business Case

Project ManagementProject ManagementCommercialisationCommercialisation

Idea Management Idea Management

Portfolio ManagementPortfolio Management

MarketingExecutionMarketingExecution

Market FeasibilityProof of ConceptMarket FeasibilityProof of Concept

“Smart entrepreneurs aren’t cowboys – they’re methodical managers of risk” – HBR May 2010

Critical learningTechnical teams will focus on the most intriguing problem

Critical learningTechnical teams will focus on the most intriguing problem

Critical Uncertainties•Market•Technology•Capability

Derailment Risks•Value Proposition•Engagement of Key Senior Sponsors

Develop common and consistent details for all projectsDevelop common and consistent details for all projects


Stay true to your strategy - Portfolio ManagementSimple Concept – Hard to implement

Driven by the Innovation Strategy

Define the arenas / bucketsAgree the spend split

Insist on uniform data for all projects

Align projects with buckets & prioritise projects within each bucket

Deploy resource in each bucket until available

resources are consumed

20%

- A- B- C

40% 30% 10%

- A- B- C- D

- A- B- C- D- E

- A- B- C- D

A, B, C, D, E, F, G, H, I, J, K

Execute strategy = spend where you intend to spend


Critical LearningMake Sure You Use Appropriate Metrics

Portfolio

Health

Portfolio

Productivity

Business

OutcomesNumber of projects in active development

% of projects in Core vs. step-out projects

% of resources deployed on step-out projects

% of projects on time

Total patents filed / granted

Value of the portfolio pipeline

CM delivery and growth

CM/te delta for tagged sales vs not tagged sales

Number of products released YTD and LTM

Revenues from new products released in last 5 years

Innovation FC as % of CM generation

Current year % of sales due to new products released in last 5 years

Return on Innovation (revenue over last 5 years/ spend over last 5 years)


Visible Leadership Counts

Creating a vision, agreeing targets, clearing the road, visible engagement and persistence are more important than only inventions

This requires leadership, judgment and risk taking

Intensity and desire alone are not enough -If you are only doing the same things as before – your future will look like your past.

In a corporate setting this means break some eggs.


Three Virtues

Nine Women cannot make a baby on one month

Nothing is impossible to the man who does not need to do it himselfBe Realistic

Have Patience

Target rich environments can kill you

Be Selective

polyurethanes investing for growth with customers worldwide keith day vp global business development...

Documents

polyurethanes division

new tools

history slide

paper slide

new world

vp business development

different skills

inappropriate metrics