zone to win - geoffrey mooreztwtest.net/ztw/presskit/zone to win 2016 stump speech.pdf · a...
TRANSCRIPT
Zone to Win
Organizing to Compete in
An Age of Disruption
Workiva Management Meeting
January 29, 2016
Las Vegas
The ChallengeCompeting in an Age of Disruption
2
The Impact of Disruptive InnovationWhen the Marginal Cost Approaches Zero
3
Data Science
Social Networks
Cloud Computing
Smart Phones
Internet of Things
The marginal cost of onboarding a new software application
The marginal cost of connecting 1-on-1 with a constituent
The marginal cost of adding a resource in a sharing economy
The marginal cost of real-time decision-making
The marginal cost of optimizing a physical system
Each wave releases billions of dollars worth of trapped value
Technology DisruptionsHow Technology Enters the Mainstream
4
CHASM
EARLY
MARKET
TORNADO
BOWLING
ALLEY
MAIN
STREET
Time
Reven
ue G
row
th
Growth
Market
Mature
Market
Declining
Market
Indefinitely elastic
middle
End of
Life
Fault
Line!
E
DCBA
Technology Adoption
Life Cycle
5
The Power of CategoryThe Category Maturity Life Cycle
Emerging
Market
Secular
Growth
(Grow
market share)
Cyclical
Growth
(Grow
wallet share)
Secular
Decline
(Exit)
Catch
Next
Wave
Except most companies don’t
Burroughs – Sperry Univac – Honeywell – Control Data
MSA – McCormick & Dodge – Cullinet – Cincom – ADR
DEC – Data General – Wang – Prime – Tandem
Daisy – Calma – Valid – Apollo – Silicon Graphics – Sun
Atari – Osborne – Commodore – Casio – Palm – Sega
WordPerfect – Lotus – Ashton Tate – Borland
Informix – Ingres – Sybase – BEA– Seibel – PeopleSoft
Nortel – Lucent – 3Com – Banyan – Novell
Quest – America West – Nynex – Bell South
Netscape – MySpace – Inktomi – Ask Jeeves – Yahoo!
Blackberry – Motorola – Nokia – Sony
Leaders Who Missed Their Next Wave
Three Investment HorizonsWhere Established Enterprises Get Stuck
7
Horizon 1
ROI in 0 to 12 mos
Horizon 2
ROI in 12 to 36 mos
Horizon 3
ROI in 36 to 72 mos
Current
Categories
Meet
Performance
Commitments
Break-Out
Categories
On-board next
generation for
future growth
Future Category
Options
Develop options
for future
growth
Do well here
Do well here too
Sticking point
The Horizon 2 ChallengeWhy Disruptive Innovations are Not Welcome
• J-curves undermine current fiscal year’s performance
• Require overlay sales forces and supply chain adjustments
• Produce little revenue, typically with very negative cash flow
• Very distracting to manage
• Unclear plan of attack, continually being revised
• Not aligned with the current relationships
• Compete directly with Horizon 1 for scarce resources
• “A” players in Sales, Marketing, and Professional Services
• Need these people to make the Horizon 1 commitments
8
This is not an R&D innovation challenge
This is a Go-to-Market challenge
Disruptive Innovation ModelIt’s Not a Funnel. It’s an Hourglass!
9
Horizon 3
Horizon 2
Horizon 1
Sustaining
Innovations
Disruptive
Innovations
The Four Zones Organizing to Engage with Disruptive Innovations
10
The Four ZonesA Playbook for Managing in an Age of Disruption
Disruptive
Innovations
Sustaining
Innovations
Incubation
Zone
Transformation
Zone
Performance
Zone
Productivity
Zone
Revenue
Performance
Enabling
Investments Horizon
3
Horizon
2
Horizon
1
Horizon
1
11
Each zone has a different mission
Each needs its own playbook
The Four ZonesEach Zone Has a Unique Funding Charter
12
• Performance Zone
• Deliver material bookings, revenues, and contribution margins
in Horizon 1
• Productivity Zone
• Deliver programs and systems for compliance, efficiency, and
effectiveness in Horizon 1
• Incubation Zone
• Deliver viable business options to catch new technology waves
in Horizon 3
• Transformation Zone
• Scale a disruptive option to material revenue (greater than 10%
of total enterprise revenue) in Horizon 2
Performance Zone Playbook: Horizon 1The Performance Matrix
13
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL
So
urc
es
of
Re
ve
nu
e(P
rod
ucts
& S
erv
ices)
Channels of Bookings(Direct & Indirect Sales)
Performance Zone Playbook: Horizon 1Getting the Performance Matrix Right
14
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL
Ro
w O
wn
ers
So
urc
es o
f R
even
ue (
BU
s)
Column Owners
Channels of Bookings (Sales)
Rows & Columns interlock at the
cell level for joint accountability
Every row and column has a
unique owner
Operating cadence:
• Weekly commits
• Monthly status reports
• Quarterly business reviews
No row or column subtotal can be
less than 10% of total
Performance Metrics: Revenue, contribution margin, churn/renewals, growth rate
Productivity Zone Playbook: Horizon 1Cost Centers Providing Shared Services
15
Finance
Central
Engineering
Enterprise IT
Customer Support
Marketing
Human Resources
1. Create and deliver productivity
programs—Effectiveness!
2. Own and operate productivity
systems—Efficiency!
3. Monitor and verify regulatory
controls—Compliance!
Legal
Procurement
Quality Control
Supply Chain
Facilities
Administration
Productivity Zone Playbook: Horizon 1The Architecture of Programs & Systems
• Programs
• Customized services
• User funded
• Optimized for effectiveness
• Programs adapt to users’ needs
• Systems
• Standard infrastructure
• Centrally funded
• Optimized for efficiency
• Users adapt to system’s rules
16
Systems Interface
Systems and programs are mutually incompatible
Manage them separately—do not blend
Programs
Systems
17
Incubation FundCEO + Board
Venture-style Funding
IOU
#1
IOU
#2
IOU
#3 IOU
#4
Finance Human Resources Administration
Zone-wide:
Shared Services
dedicated to the
Incubation Zone
IOU-specific:
GM, sales, marketing,
engineering, services,
and support resources
Incubation Zone Playbook: Horizon 3Venture-Style Independent Operating Units
Incubation Zone Playbook: Horizon 3Venture-Style Independent Operating Units
18
All functions report into GM
(No shared resources with
Performance Matrix)
Each IOU run by a dedicated
General Manager
Funding & reviews outboard of the
Annual Operating Plan
Venture-Based Metrics
• Seed: Technology POC
• Series A: MVP + first customers
• Series B: Win beachhead market
• Series C: Exit to scale
Incubation FundCEO + Board
IOU
#1
IOU
#2
IOU
#3 IOU
#4
FinanceHuman
ResourcesAdministration
1. Transition to Transformation Zone
2. Transition to Performance Zone
3. Transition to Productivity Zone
4. Spin out
5. Get bought
6. Shut down
SIX
EXIT
PATHS
Transformation Zone Playbook: Horizon 2Transformational Initiatives
19
*
H2 TI
H3 IOU*H3 IOU
*H3 IOU
*H3 IOU*
Incubation Set
Insert a new row into the
Performance Matrix
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL
H1
Navigate the bottleneck
in the hour glass
Transformation Zone Playbook: Horizon 2Why Only One Transformation at a Time
• Performance Zone
• Must “donate” ten percent of its resources to the transformation
• Must “make the number” with the other 90 percent
• Productivity Zone
• Must develop new programs to backfill the donated 10 percent
• Must keep all its systems and compliance commitments
• Incubation Zone
• Must redirect all mature IOUs to another exit
• Must slow roll earlier stage IOUs to align with next window
20
Cannot do two transformations in parallel
Zone to WinOrganizing to Compete in an Age of Disruption
21
The Four Zones in ActionZone Offense
Disruptive
Innovations
Sustaining
Innovations
Incubation
Zone
Transformation
Zone
Performance
Zone
Productivity
Zone
Revenue
Performance
Enabling
Investments4
2
3
22
1
Enlist everyone in scaling the new business
The Four Zones in ActionZone Defense
Disruptive
Innovations
Sustaining
Innovations
Incubation
Zone
Transformation
Zone
Performance
Zone
Productivity
Zone
Revenue
Performance
Enabling
Investments 2 4
23
Enlist everyone in stabilizing the current business
1 3
The Four Zones in ActionBetween Waves (No Disruption in Play)
Disruptive
Innovations
Sustaining
Innovations
Incubation
Zone
Transformation
Zone
Performance
Zone
Productivity
Zone
Revenue
Performance
Enabling
Investments3
4 1
2
24
Harvest your rewards, build up your reserves
Recap
• Age of disruption
• Convergence of waves
• Massive opportunity
• Can’t stand still
• Four zones
• Different missions
• Different playbooks
• Zone to win
• Zone Offense
• Zone Defense
• Between Waves
25
