BII FDCag v01.1 · 11/30/16 5 H3: A Focus on 10X, New Categories, New Needs Mainstream Google Product Development Google X Observed Paerns: H1: Core: 60-70%

11/30/16

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Ikhlaq Sidhu, !Chief Scientist & Founder, Center for Entrepreneurship & Technology!Department of Industrial Engineering & Operations Research !IEOR Emerging Area Professor Award

Innovation & Leadership

Innova,onJourneys

Experimenta,onAdapta,on/PivotsLearningSearching

WorkingBusinessModel

ScaleOpera,onsMeasuresExecu,ng

Disrup,on

hHp://en.wikipedia.org/wiki/William_C._DurantOriginalstory:SteveBlank

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HorizonLevelPlanningPor/olio•  HorizonLevelAlloca,ons

– H1CoreBusiness– H2Adjacencies– H3NewCategories

H1:Core:60-70%

(effec,veness/execu,on)

H2:Adjacencies25-30%(learning)

H3:Moonshot5-10%

(learning)

RoadmapDriven,TechnologyDevelopment

Mustlearn,Unknownvariables:typicallymarket,technology

MoonshotBigpayoffAllunknown

Considera,on:Areleaderscompensatedforalllevels?

BuildingBlocksofInnova,onProcessWorkingBusinessModel

H1:Core:60-70%



H3:Moonshot5-10%

(learning)

Experimenta,on,Adapta,on,LearningCustomer+Technology

Scale,Opera,ons,Measures,Accoun,ng

Skills:

Mo,va,on: Changetheworld Don’tdeviatefromaworkingprocess

Characteris,cs: Comfortablewithunknowns

Likesplans,avoidsunknowns

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H1:Roadmap-DrivenExample:ProcessorRoadmap

FeaturesandPerformance

Targetof2018?

•  Process•  Requirements•  Advanceproblems•  Tools

Note:BusinessModelisKnownCustomersareKnownTechnologyismostlyknown

ObservedPa4erns:

H1:Core:60-70%



H3:Moonshot5-10%

(learning)

HigherRiskandReward

Open

ClosedRoadmapDriven Integrated

M&A

CorporateResearch

IntrinsicNeeds

Transi,onLookahead

MeasuresIPAssetsAdvancedDesignUseinnextproductFunding:byBusinessUnit

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H2:Whatifthenextmarkettransi,onisnotondirectlyontheroadmap?

Mobileof2018?

Mobile

Desktop

ObservedPa4erns:

H1:Core:60-70%



H3:Moonshot5-10%

(learning)

HigherRiskandReward

Open


M&A

CorporateResearch

IntrinsicNeeds

Transi,onLookahead


Easeofentry/newmarketsExternalinfluenceCustomerstorySomeprojectsmustfail

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H3:AFocuson10X,NewCategories,NewNeeds

MainstreamGoogleProductDevelopment GoogleX

ObservedPa4erns:

H1:Core:60-70%



H3:Moonshot5-10%

(learning)

HigherRiskandReward

Open


M&A

CorporateResearch

IntrinsicNeeds

Transi,onLookahead


10XGainExternalAwarenessNewcategoriesCorpFunding

Easeofentry/newmarketsExternalinfluenceCustomerstorySomeprojectsmustfail

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AConcept:IsitaTechnologyorBusiness

SteveBlank

Opera7onalMetricstoscaleCompletedEcosystemSalesProcessBusinessModelEngagingStoryInsightSidhu/BerkeleyMethod

Technology Readiness Level

DevelopedatNASA

AConcept:IsitaTechnologyorBusiness

ProposedbySteveBlank

Opera7onalMetricstoscaleCompletedEcosystemSalesProcessBusinessModelEngagingStoryInsightVersion:Sidhu,BerkeleyMethod

Technology Readiness Level

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Iden,fytheStageofYourProjectTechnical Readiness

System Test, Launch, Ops System/Subsystem Demonstration Development Progress Feasibility Research Insight Story &

Value Validation Business

Model SalesProcess

Complete Ecosystem

OperationalMetrics

Business Investment Readiness

X

Y

Z

14

Innovation Leadership

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AFrameworkforInnova,on

Opera,onalInnova,on

Story/Adapta,on

FinancialInnova,on,orDiversifyw/

Filters

Ecosystem

Innova,onCulture(Behaviorsofthegroup)

Innova,onLeadership

(BehavioroftheLeadership)

Lifecycle,BusinessModels,Strategy,Process,andLeanModels

LeadershipforTradi,onalFirms

ATopdownSetdirec,onandget

alignment

Leader

Execu,ves

Customers

Employees

Peers

Thismodeldoesnotworkaswellifinnova,oniscri,cal.

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LeadershipintheContextofInnova,onisDifferent

•  Managing(attheedgeof)Chaos

•  BestIdeasarenotfromtheleader

•  BoHomupideasmeettopdownobjec,ves

•  Transparency,Flatness,DataDriven

•  Tolerancefordiverseideas

•  Organiza,onandpeoplemustlearnandadapt.

Whereisthebalance:protectthebrandandhistoryvsinventthenewstory

Organiza,onalProfiles*HiringforEmployees*Selec,onofLeaders

Innova7onMindset:- AsksWhy,NeedsContext- Hardtomanage- Easilyboard- Ques,onsHierarchy/boundaries- Mindseveryone’sbusiness- Acceptsrisk,OKwithAmbiguity- Eagertotakeoncomplexity

Reference:NirMerry,AppliedMaterials

Opera7onsMindset:- Doeswhattheyaretold/job- Easytomanage- Acceptsthatitsnotmybusiness- Needsupfrontclarityontask- AvoidsRisk- Acceptsconven,onalwisdom

H1:Core:60-70%



H3:Moonshot5-10%

(learning)

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Innova7on:(Intrapreneur)- AsksWhy,NeedsContext- Hardtomanage- Easilyboard- Ques,onsHierarchy/boundaries- Mindseveryone’sbusiness- Acceptsrisk,OKwithAmbiguity- Eagertotakeoncomplexity



X

Andhowshouldaleadermanagethisgroup?

X


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GoodBehaviorsleadopportunity,andsuccess

BadBehaviorsleadtopoorresultsandweakrela,onships.

MindsetleadstoBehavior(iethewayinwhichoneactsor

conductsoneself,especiallytowardsothers.)

TheBerkeleyMethodwithMindset&BehaviorsAholis,c,journey-basedapproachtoentrepreneurshipandinnova,on

FairNego,a,onCommunica,on

NetworksFacili,esServicesMentorsRulesofEngagement

FrameworksOpportunityMVPRaisingFundsBusinessModels

Mindset&Behaviors

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BerkeleyInnova,onIndex

Berkeley Innovation Index: An Approach for Measuring and Diagnosing Individuals’ and Organizations’ Innovation Capabilities

FDC BII Assessment 11/30/2016 Prof. Ikhlaq Sidhu, Nawal Jorio

CompanyorOrganiza,on

X-RaytoUnderstand

InputvsOutputInvestmentR&DReturns

UnderstandPeople&Func,ons

DataAnaly,cs

Wecannowseeandunderstandatthelevelofpeople

BerkeleyInnova,onIndex

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§  Assessments taken: §  Workgroup assessment

§  Data overview - §  164 participants §  12 companies §  7 functional areas

FDC BII ASSESSMENT Context

Hig

h Lo

w

Innovation culture

Ope

ratio

nal f

ocus

Low High

Berkeleyinnova7onindexOpera7onalfocusvs.innova7onculture

Par,cipants

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Hig

h Lo

w

Innovation culture

Ope

ratio

nal f

ocus

Low High

Berkeleyinnova7onindexOpera7onalfocusvs.innova7onculturebyfunc7onalarea

Marke,ng

By functional area

Operations Engineering

Berkeley Innovation index

Mechanism

Operational focus variables

Innovation culture variables

Transparency in decision making

Responses to organizational failures

Organizational comfort with ambiguity and learning

Where ideas originate

Understanding of measures for market share

Understanding of measures for service quality

Understanding of measures for customer happiness

Understanding of measures for fully allocated product or service cost

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Par,cipants

§  HighscoresforInnova,onCultureandOpera,onalfocus

§  HigherspreadonOpera,onalFocusscores

OPERATIONAL FOCUS VS INNOVATION CULTURE Workgroup assessment

Companies

OPERATIONAL FOCUS VS INNOVATION CULTURE

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INNOVATION CULTURE VARIABLES

§  Beingcomfortablewithmakingdecisionsunderuncertain,esandgenera,ngideasatalllevelsisthebiggestchallengefortheorganiza,on

§  Mostpeoplefeelcomfortablewithmakingfailuresintheorganiza,on

§  Havingaclearmeasureforcustomerhappinessandtheallocatedproductorservicescostisthebiggestchallengeintheorganiza,on

§  Mostpeopleintheorganiza,onknowthemarketshareoftheproductorservices

OPERATIONAL FOCUS VARIABLES

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OPERATIONAL FOCUS VS INNOVATION CULTURE Workgroup assessment

§  HigherspreadonOpera,onalFocusscores

§  HighestInnova,onCultureScore:

§  RH,Finances,Administra,on

§  HighestOpera,onalFocusscore:

§  CustomerService

CLUSTER ANALYSIS FOR ENGINEERING GROUP Workgroup assessment

Samplesize•  Count:73Innova7onculture:•  Average:3.237•  Standarddevia,on:0.686

Opera7onalfocus•  Average:3.233•  Standarddevia,on:0.804

⇒  Higherspread

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CLUSTER ANALYSIS FOR MARKETING

Samplesize•  Count:6•  LowsamplesizeInnova7onculture:•  Average: 3.073•  Standarddevia,on:1.164

⇒  HigherspreadOpera7onalfocus•  Average: 3.250•  Standarddevia,on:0.866

CLUSTER ANALYSIS FOR OPERATIONS

Samplesize•  Count:15⇒  Lowsample

sizeInnova7onculture:•  Average: 3.138•  Standarddevia,on:0.541

Opera7onalfocus•  Average: 2.733⇒  rel.lowscore•  Standarddevia,on:0.975

⇒  higherspread

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CLUSTER ANALYSIS FOR R&D

Samplesize•  Count:38Innova7onculture:•  Average: 3.375

=>HighScore•  Standarddevia,on:

0.847Opera7onalfocus•  Average: 3.125•  Standarddevia,on:

0.862

CLUSTER ANALYSIS FOR CUSTOMER SERVICE

Samplesize•  Count:7⇒  LowsamplesizeInnova7onculture:•  Average: 3.063•  Standarddevia,on:

0.590Opera7onalfocus•  Average: 3.929⇒  Veryhighscore•  Standarddevia,on:

0.607

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CLUSTER ANALYSIS FOR HR, FINANCES, ADMINSTRATION

Samplesize•  Count:10⇒  LowsamplesizeInnova7onculture:•  Average: 3.656•  Standarddevia,on: 0.471Opera7onalfocus•  Average: 3.200•  Standarddevia,on: 0.823⇒  Higherspread

CLUSTER ANALYSIS FOR SALES

Samplesize•  Count:9⇒  LowsamplesizeInnova7onculture:•  Average: 2.722⇒  rel.lowscore•  Standarddevia,on:

0.953⇒  Higherspread

Opera7onalfocus•  Average: 2.500⇒  rel.lowscore•  Standarddevia,on:

0.545

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FUNCTIONAL GROUP ANALYSIS

BREAK-DOWN OF THE INNOVATION CULTURE SCORE BY FUNCTIONAL GROUPS

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BREAK-DOWN OF THE OPERATIONAL FOCUS SCORE BY FUNCTIONAL GROUPS

CORRELATION OF TRUST AND PERSONAL RELATIONS WITH INNOVATION CULTURE AND OPERATIONAL FOCUS

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H1:Core:60-70%



H3:Moonshot5-10%

(learning)

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EndofSession

Documents

BII FDCag v01.1 · 11/30/16 5 H3: A Focus on 10X, New Categories, New Needs Mainstream Google Product Development Google X Observed Paerns: H1: Core: 60-70%