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Systematic Business
Innovation
?
JosephSchumpeter
“Creative Destruction…
incessantly revolutionizes the
economic structure from
within, incessantly destroying
the old one, incessantly
creating a new one.”
Creative Destruction
is the essential fact about capitalism
It is what every capitalist concern
has got to live in
Creative Destruction
generates amazing
opportunities
That’s why it’s so powerful
and why it’s so relevant
They haven’t taken on board his distinction between Invention and InnovationINVENTION INNOVATION
This should be as demanding and exciting as inventing the thing you do.
Every aspect of it
An entrepreneur also innovates the entire business that creates &
delivers the new thing they do
When you
Invent and Innovate
it can produce
extraordinary success
But that’s not what most people do
‘Flat’ StructurePoor Management Information
Short-Term OutlookUnstructured Communications
Overworked & stressed founder/s
Systematic
Business
Innovation
A Business is a System
“A set of interacting or
interdependent components forming an
integrated whole”
“A set of interacting or
interdependent components forming an
integrated whole”
Product/Service
Process/ Workflow
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
Structure
Product/Service
Process/ Workflow
Structure
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
How do you grow a
business in a Systematic
way?
every detail, every element
must be building towards your
ultimate Vision
It’s like directing a film:
You need two
‘heads’
Invent your
product+
Innovate your
business
But what do you actually
DO?
You need some simple practical tools to help you:
a) think about your business as a system
b) design it systematically
THE NEW THING THAT YOU DO
BUSINESS ENGINE
BUSINESS STRATEGY
BUSINESS ENGINE
BUSINESS STRATEGY
THE NEW THING THAT YOU DOProduct/Service
Process/ Workflow
Business Model
Marketing
Structure
Leadership/ Management
People/ Skills
Net Profits
Turnover/ Sales
THE NEW THING THAT YOU DO
BUSINESS ENGINE
BUSINESS STRATEGY
OPERATIONAL COMPETENCE
= the skills to execute on
The New Thing That You Do (The Invention)
Business Strategy isn’t developed
Business Engine is neglected
Filling The Gap• ‘Consultants’
• Your Accountant
•Generic Business Coaches
•Making It Up As You Go
Start-up Grow-upStay-up
•You’re drowning in paperwork -
especially financial
•Quality of work is starting to slip
•Cash flow is bumpy
•Gaps appear in communications
•Team morale is not so great
•You feel overworked & stressed
10/12 30/35
Lessons:
•Understand which stage you are in
•Look out for ‘transition symptoms’
•Design/re-design your business
system for the next stage
DO THIS CONTINUOUSLY
THE NEW THING THAT
YOU DO (Product/Service)
Process/ Workflow
Structure
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
Product/Service
Process/ Workflow
Structure
Leadership/ Management
Business Model
People/ Skills
Marketing
Turnover/ Sales
Net Profits
Q1 Q1Q4 Q4Q2 Q3Q3Q2
How you can use a bookcase to help turn your Systematic Business Innovation into an Action Plan
Example: an early-stage online jewellery business that is growing fast
& sees opportunities for it’s own e-commerce operation, partnering with the big online retailers and opening
operations in China
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Marketing
Turnover/ Sales 1.5m
Net Profits 150K
Full-time MD
Free up MD 50%
Shanghai Warehouse
Bespoke Service
Multiple rev streams
Team = 15 people
Open in China
YEAR
1
YEAR
2
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Open in China
Turnover/ Sales 1.5m
Mgmt team
Net Profits 150K
Full-time MD
750K 1m 1.35m1.25m1.1m800K 900K
Shanghai Warehouse
Bespoke Service
Team = 15 people
Multiple rev streams
Marketing
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Open in China
Turnover/ Sales 1.5m
Mgmt team
Net Profits 150K
Full-time MD
750K 1m 1.35m1.25m1.1m800K 900K
Shanghai Warehouse
Bespoke Service
Multiple rev streams
Team: 6 Hire studio assistant
Hire designer
Hire sales/account mgr
Hire Shanghai head
Team = 15 people
Promote Ben to MD
Mgmt training Ben
Ben: build mgmt team
Ben: build mgmt team
Marketing
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Open in China
Turnover/ Sales 1.5m
Mgmt team
Net Profits 150K
Full-time MD
750K 1m 1.35m1.25m1.1m800K 900K
Shanghai Warehouse
Bespoke Service
Multiple rev streams
Team = 15 people
Team: 6 Hire studio assistant
Hire designer
Hire sales/account mgr
Hire Shanghai head
Promote Ben to MD
Mgmt training Ben
Ben: build mgmt team
Ben: build mgmt team
Own e-commerce
3rd party sites
Open key accounts:
Amazon, Net-a-Porter
Marketing
Q1 Q1Q4 Q4Q2 Q3Q3Q2
People/ Skills Team: 6Hire studio assistant
750K 1m
Product/ Service
Process/ Workflow
Structure
Business Model
Leadership/ Management
Hire designer
Hire sales/account mgr
Hire Shanghai head
Ben: build mgmt team
Free up MD 25%
Free up MD 50%
Prep Shanghai
Open Shanghai
Ben: build mgmt team
Shanghai research
Revamp Website
Own e-commerce
3rd party sites
Open key accounts:
Amazon, Net-a-Porter
Multiple rev streams
Promote Ben to MD
(too?) flat
Turnover/ Sales 1.5m1.35m1.25m1.1m800K 900K
Shanghai products
Shanghai products
E-commerce range
Mgmt training Ben
Promote Ben to MD
3 x Board meetings
Net Profits 94K 100K 126K 150K 150K165K 188K 169K
Shanghai Warehouse
Bespoke Service
Full-time MD
Team = 15 people
Marketing
Don’t crash your business because you think any fool can run one…
Invent and Innovate!