April 18, 2023

Innovation and Digital DisruptionBrian PinnockProduct Strategy and Innovation

Cutters, Makers, Refrigerators

AGENDA

Dark side of Disruption

Disrupting Business Models

Guided Innovation

5

Moore’s Law

1010

1960 2010

Transistors per Die Moore’s Law

Intuitive linear view

Source: Martin Grotschel 2010 - http://1.usa.gov/P9kSzY

1,000x

43,000x

1988-200380yrs : 1min

No Moore’s Law for Software?

Artificial Intelligence

April 18, 2023

Dark Side of Disruption

10Exponential Growth

Productivity

Employment

Race against the Machine

Source: Brynjolfsson & McAfee 2012

Index of US Growth GDP vs. Income

GDP per capita has grown faster than real median household incomeSource: Brynjolfsson & McAfee 2012

US Job Growth by Decade

Deep structural issues not just a consequence of the recessionSource: Brynjolfsson & McAfee 2012

Race against the Machine

Source: Brynjolfsson & McAfee 2012

Source: NY Times

Then Now

Disrupting Lawyers

Source: Fast Company

Then Now

Disrupting Pharmacists

Source: NY Times

Then Now

Live Translation

Source: Wired

Then Now

Disrupting Industrial Robots

Source: KPCB

Then Now

Disrupting Driving

April 18, 2023

Disrupting Business

Is it easy to use?

Does it enable people to connect in new ways?

Is it useful?

User Experience

Does it tap new revenue streams?

Is it done at a lower cost?Business Model

Does it change the flow of value?

Does it shift power from one player to another?Ecosystem Value

Evaluating Disruptions

How much of the old value proposition was just lettuce?

Source: KPCB

Then Now

Disrupting Books and Publishing

Source: KPCB

Then Now

Disrupting Music

Source: KPCB

Then Now

Disrupting Print Media

Source: KPCB

Then Now

Disrupting Computing Devices

Source: Bain

Then Now

Disrupting Photography

Source: KPCB

Then Now

Disrupting Video

Source: Tesco

Then Now

Disrupting Retail

Source: KPCB

Then Now

Disrupting Point of Sale

Source: Scientific American

Then Now

Disrupting Insurance

Source: Bitcoin P2P

Disrupting Money

Then Now

April 18, 2023

Disrupting Government

Source: Strange Horizons

Then Now

Disrupting War

Source: KPCB

Then Now

Disrupting Healthcare Access

Then Now

Disrupting Early Education

Source: Economist – World in 2050

Source: Economist – World in 2050

Then Now

Disrupting Higher Education

April 18, 2023

Guided Innovation in a Disruptive World

An Aladdin's cave full of innovation treasure is available to anyone that has the secret password.

Innovation Myth

Innovation

Innovation is a Smurf

word

Semi-RadicalProcess

Innovation

RadicalInnovation

IncrementalInnovation

Semi-RadicalTechnologyInnovation

Change in B

usi

ness

Pro

cess

Change in Technology

Low High

Hig

hLo

w

Types of Innovation

Source: Davila et al 2006

Exert strong leadership on the strategy and portfolio

Integrate innovation into the business mentality

Integrate innovation into the business structures

Align innovation with strategy

Manage creativity and value capture

Neutralize organizational antibodies

Establish networks

Use metrics and incentives

A Recipe for Innovation?

Source: Davila et al 2006

Engage customers directly to generate new ideas. Develop new products and services based on superior end-user understanding. Seek out both articulated and unarticulated needs. First to market. Eg. Apple, Procter & Gamble

Need Seekers

Closely monitor their markets, customers, and competitors, focusing largely on creating value through incremental innovations to their products. A more cautious approach. Depends on being a “fast follower”

E.g. Hyundai and Caterpillar

Market Readers

Depend heavily on their internal technological capabilities to develop new products and services. Leverage R&D investments to drive both breakthrough innovation and incremental change, in hopes of meeting the known and unknown needs of their customers via new technology. E.g.Google and Bosch

Technology Drivers§

Need Seeker strategy offers highest potential of superior performance(Booz & Company’s annual study of R&D spending – 2012)

Types of Innovators

Cautionary Tale: Too much Innovation

Too much innovation and over diversification without taking cognizance of market structure changes.

Innovation = Ideas + motivation

Innovation = ideas + process

Innovation = ideas + leader

“Innovation and ongoing operations are always and inevitably in conflict. But

ongoing operations pays for innovation.”

Innovation = ideas + leader + team + plan + structure

Misguided Innovation Ideas

Source: Govindarajan & Trimble 2010

You don’t shuffle your way from one S-curve to another. You have to jump.

Gary Hamel

Zone of greatest

uncertainty

Dominant force

Emerging change

Weak signal

Horizon 1

Horizon 2

Horizon 3

Time (years)

Happens across 3 time horizonsD

egre

e o

f S

trate

gic

Fit

Source: Baghai et al 1999

Horizon 1Extend and defend the core

Horizon 2Build emerging businesses

Horizon 3Create viable options

Valu

e

Time (years)

Each has a different point of focus

Source: Baghai et al 1999

It depends on the types of projects

The current way of doing business is dominating

Horizon 1 Horizon 2 Horizon 3

Exploring ways to develop but mostly built from the core

Exploring completely new ways of doing things

Annual Operating Plan

Specific Campaigns & Plans

Incremental Innovation

Pure Market Research

Dominant System

Current Business

Invent, Develop, Deploy

Leveraging Existing Capabilities

Metrics: Existing, Harder, Based on Profitable growth

Business Building Strategies

Emerging Concepts & Models

Disruptive, more Collaborative

Needs related

New RelatedNeed to explore

Emerging Business Desirable State

Research, Demonstrate, Disrupt & Discover

Emerging & Existing Capabilities

Metrics: Ring-fence areas of possibledisruption

Place to Explore & Experiment

Aspiration & Future Promise

Radical Innovation

Social Trending & Narratives

Game changing nature in Industry

Viable options, plenty of unknowns

Envision, Explore & Embody

Exploring Radical New Capabilities

Metrics: more on exploring, built on emerging themes

Different skills & Different Measurement

Source: Hobcraft 2012

Vis

ibilit

y

Time

Less than 2 years

2 to 5 years

5 to 10 years

More than 10 years

Years to mainstream adoption:

Obsolete before plateau

Peak of Inflated Expectations

Plateau of Productivity

Slope of Enlightenment

Trough of Disillusionment

Technology Trigger

Hype Curve Matches 3 Horizons

Source: Fenn & Raskino 2008Horizon 3 Horizon 2 Horizon 1

Eff

ort

& Involv

em

ent Ear

ly te

chnolo

gy sca

nning, sco

ping

Track

ing and ra

nking

Early

tech

nology t

rials,

Evaluat

ions a

nd pro

toty

pes

Proo

f of c

once

pts

New Prod

uct B

uilds

(H1 B

usiness

Units

)

Prod

uctize

and R

ollou

t

H2 Teams H1Teams

Market Ready

Technology Trigger

Peak of inflated Expectations

Trough of Disillusionment Slope of Enlightenment Plateau of Productivity

Impro

ve a

nd Ext

end

H3 Teams

Immature Technology Stage

New Prod

uct B

uilds

(H2 &

Sku

nkwor

ks)

Maturity Models

Individual organisms don’t evolve. Only the species evolves.

Clayton Christensen

April 18, 2023

Discussion

http://www.wired.com/gadgetlab/2012/12/ff-robots-will-take-our-jobs/

http://www.kpcb.com/insights/2012-internet-trends

http://www.fastcompany.com/1738545/ucsfs-robotic-pharmacy-frees-time-pharmacists

http://www.innovationexcellence.com/blog/2012/08/03/navigating-the-three-horizon-framework/