Слайд 1Innovation at 50x
Steve Blank
@sgblank
www.steveblank.com
Слайд 3Innovation ≠ Incubator
Innovation ≠ Accelerator
Innovation ≠ Startup
Innovation ≠ Lean Anything
Innovation ≠
Open
Innovation ≠ Reorganization
Слайд 4Innovation ≠ Incubator
Innovation ≠ Accelerator
Innovation ≠ Startup
Innovation ≠ Café’s
These are all
physical places to do innovation
Слайд 5Innovation ≠ Incubator
Innovation ≠ Accelerator
Innovation ≠ Startup
Innovation ≠ Café’s
These are all
physical places to do innovation
Having them does not guarantee any innovation will happen
Слайд 6Innovation Development
Places:
R&D, Engineering, Incubators, Accelerators, Hackathons, Open Innovation, etc.
Methodology:
Waterfall, Agile,
Lean
Pedagogy:
Lean LaunchPad/I-Corps, Case-studies, Mentors
Metrics:
KPI’s, StateGate®, ECV, Pivots, IRL, TRL, …
Funding
SBIR, VC, Corporate VC, M&A, etc.
Слайд 7Innovation Development
Places:
R&D, Engineering, Incubators, Accelerators, Hackathons, Open Innovation, etc.
Methodology:
Waterfall, Agile,
Lean
Pedagogy:
Lean LaunchPad/I-Corps, Case-studies, Mentors
Metrics:
KPI’s, StateGate®, ECV, Pivots, IRL, TRL,…
Funding
SBIR, VC, Corporate VC, M&A, Incremental, etc.
Слайд 8Innovation Is?
Satisfying users current or future wants/needs by turning an idea
into a product or service
Слайд 9Innovation Is?
Satisfying users current or future wants/needs by turning an idea
into a product or service
with speed and urgency, using minimal resources and costs
Слайд 10Innovation Succeeds
Where there is a path to adoption
When it fits into
the overall mission and strategy
Because it performs, has metrics, …
It is managed as an innovation portfolio
And has management support (the spirit of “yes”)
Слайд 11Continuous disruption requires Continuous Innovation
Steve Blank
Слайд 12Continuous disruption requires Continuous Innovation
Steve Blank
what’s this mean?
∧
Слайд 13Continuous disruption requires Continuous Innovation
Steve Blank
∧
what’s this mean?
External Disruption
U.S. Navy assumed
carriers would always defend the Western Pacific
Asymmetric warfare = “Carrier-killer ICBMs” = disruption
Слайд 14Continuous disruption requires Continuous Innovation
Steve Blank
∧
what’s this mean?
Internal Disruption
The military built
encryption hardware to protect classified data
Waterfall development process and long device lifecycle
Now they post software that enable their customers to implement their own solutions
Using commercial off-the-shelf software broke the traditional model = Disruption
Слайд 15Our Competitors Speed is a Threat
technology, channels, etc.
Слайд 16Our Competitors Speed is a Threat
Our Speed is the Mitigation
Continuous innovation,
adaptability, lean, etc
Слайд 17Continuous Innovation requires new management tools
Steve Blank
Слайд 18Continuous Innovation requires new management tools
Lean Innovation Management
Steve Blank
Слайд 19Why Lean Innovation Management?
10x the number of initiatives in
1/5 the
Слайд 21Agencies Start as Innovation Engines
New/Disruptive Innovation
Disruptive
Business Model Innovation
Better/faster/cheaper
Innovation requires no restrictions
by plans, procedures or processes
Success = finding a repeatable and scalable business model
Grows and scales
Steve Blank
Continuous Innovation
Слайд 22Success Creates “Debt”
Success creates
Technical debt
Organizational debt
Steve Blank
New/Disruptive Innovation
Слайд 23Type of Innovation
Innovation Becomes Execution
Process Execution
Disruptive Innovation
Success means scale
Scale requires plans,
procedures, processes, incentives, KPI’s
Innovation becomes execution
Refactoring Group
Steve Blank
Continuous Innovation
Слайд 24Type of Innovation
Innovators Leave or Start New Initiatives
Process Execution
Disruptive Innovation
Founders/early employees
don’t fit in execution organizations
Short-sighted companies: innovators leave
Far-sighted companies: they start the next cycle of innovation
Refactoring Group
Steve Blank
Continuous Innovation
Disruptive Innovation
Слайд 25Can You Create an Organization that Executes and Innovates?
Слайд 26Can You Create an Organization that Executes and Innovates?
It’s Called an
Ambidextrous Organization
Source: James March, Charles O’Reilly, Michael Tushman
Слайд 27An Ambidextrous organization achieves breakthrough innovations
Source: James March, Charles O’Reilly, Michael
Tushman
Слайд 28An Ambidextrous organization achieves breakthrough innovations while relentlessly improving the way
they execute current business model
Source: James March, Charles O’Reilly, Michael Tushman
Слайд 29An Ambidextrous organization achieves breakthrough innovations while relentlessly improving the way
they execute current business model and serve existing customers
Source: James March, Charles O’Reilly, Michael Tushman
Слайд 30An Ambidextrous organization achieves breakthrough innovations while relentlessly improving the way
they execute current business model and serve existing customers
= We can chew gum and walk
at the same time
Слайд 32Types of
Company Innovation
Steve Blank
Слайд 33Three Horizons of Innovation
Source: Baghai, Coley, White
our established capabilities
Слайд 34Three Horizons of Innovation
Source: Baghai, Coley, White
Product
Product
Product
Слайд 35Three Horizons of Innovation
Source: modified Baghai, Coley, White
Products
Products
Products
programs
capabilities
our established capabilities
Слайд 36New Three Horizons of Innovation
Known
Unknown
Partially Known
Level of innovation is defined by
whether
the business model is being executed, extended or explored!
Execute
Explore
Extend
Слайд 37Three Horizons of Innovation
Existing Business Model:
Process Innovation
Execute Core Mission
Known
Mission- Critical
Projects
Слайд 38Three Horizons of Innovation
Existing Business Model:
Process Innovation
Execute
Known
Partially Known
New Opportunities via
Business Model
Innovation
Extends Core Mission
Mission- Critical Projects
Слайд 39Three Horizons of Innovation
Existing Business Model:
Process Innovation
Execute
New Opportunities via
Business Model Innovation
Execute/Search
Known
Unknown
Partially
known
New/Disruptive
Business Model
Explores
Mission- Critical Projects
Слайд 40Three Horizons of Innovation
Existing Business Model:
Process Innovation
Execute Programs
Continuous Improvement
New/Disruptive
Business Model
Makes
MVP’s
New Opportunities via
Business Model Innovation
Runs Pilots
Make Prototypes
Known
Unknown
Partially known
Mission- Critical Projects
Слайд 41Capabilities/Risk Assessment
Existing Capabilities
Low Risk
Need New Capabilities
High Risk
Some Capabilities
Moderate Risk
Known
Unknown
Partially known
Mission- Critical
Projects
Слайд 42Innovation at All 3 Horizons
Existing Business Model:
Process Innovation
New/Disruptive
Mission Model
New Opportunities
via
Business Model Innovation
Known
Unknown
Partially known
Mission- Critical Projects
Слайд 43Innovation Portfolio
Process Innovation
Disruptive Innovation
Continuous Innovation
Build
Buy
Partner
Open
Types of Innovation
Innovation
Portfolio
Horizon 1
Horizon 2
Horizon 3
Steve Blank
Слайд 44Process Innovation
Product Mgmt Is the Current Process for
Horizon 1
Horizon 1
Extend
the core
Product Management
Known
Stakeholders
Use traditional methodologies for Horizon 1 projects
Steve Blank
Слайд 45
Process Innovation
Disruptive Innovation
Continuous Innovation
Lean Is the Process for
Horizon 2 &
3 Innovation
Horizon 1
Extend the core
Horizon 2
Horizon 3
Speed &
Urgency
Lean
Use Lean Methodologies for Horizon 2 and 3 projects
Steve Blank
Слайд 46Managing Three Horizons of Innovation - Current
Existing Business Model:
Process Innovation
Execute
New/Disruptive
Business
Model
Search
New Opportunities via
Business Model Innovation
Execute/Search
Known
Unknown
Partially known
Lean Innovation Mgmt
Process Mgmt
Слайд 47Managing Three Horizons of Innovation - Goal
Existing Business Model:
Continuous Innovation
Execute
New/Disruptive
Business
Model
Search
New Opportunities via
Business Model Innovation
Execute/Search
Known
Unknown
Partially known
Lean Innovation Mgmt
Слайд 48
Disruptive Innovation
Continuous Innovation
Lean Means Getting Out of Your Office
Horizon 2
Horizon 3
Speed &
Urgency
Lean
Steve Blank
If you’re not talking to 10’s of customers, it’s not lean
If you’re not building iterative and incremental minimum viable products, it’s not lean
Слайд 49Horizon 3
Horizon 3 Needs To Leave Home
Process Innovation
Continuous Innovation
Disruptive Innovation
Physically separate
from
operating divisions
Company Incubator, etc
Their own plans, procedures, policies, incentives and KPI’s
They operate with speed and urgency
Goal is to find a repeatable and scalable mission model
Steve Blank
Слайд 50Intrapreneurs are (Good) Rebels
Source: Carmen Medina www.rebelsatwork.com
Слайд 51Horizon 3 Protects Mavericks
Horizon 1 Fires Mavericks
In Horizon 1
Pains in the
butt
Always looking at something different
Doesn’t get with the program
In Horizon 3
The head of your innovation project
Invents your next capability
Слайд 52Horizon 1 Procedures
Meets a Horizon 3 Project
Steve Blank
Слайд 57“Get to Yes”
Corporate support of Innovation in
All 3 Horizons
Process
Innovation
Refactoring Group
Company support orgs
Steve Blank
Task Support Organizations to work inside Horizon 2/3
Assign Finance, Legal, HR, etc.
Job is helping all Horizon projects “get to yes”
leverage existing assets and capabilities is critical
Disruptive Innovation
Слайд 58Success Creates “Debt”
Success creates
Technical debt
Organizational debt
Steve Blank
New/Disruptive Innovation
Слайд 59Horizon 3
Refactoring is an Integral Part of Innovation
Process Innovation
Disruptive Innovation
Horizon 3
takes shortcuts
Technical shortcuts add up and become what is called
Technical debt
People/process shortcuts are Organizational debt
Refactoring “cleans up” debt by restructuring it
You need a process organization dedicated to refactoring Horizon 3 projects
Refactoring Group
Steve Blank
Horizon 1
Слайд 60Company Incentives & Goals
In support of Innovation in All 3 Horizons
Disruptive
Innovation
Steve Blank
Companies operate on goals and incentives
Incent mavericks, incent support, incent adoption
Process Innovation
Refactoring Group
Company support orgs
Слайд 61Company Incentives & Goals
In support of Innovation in All 3 Horizons
Disruptive
Innovation
Steve Blank
Company operates on goals and incentives
Incent mavericks, incent support, incent adoption
If there are no Horizon 2/3 incentives in the company then there is no real commitment to innovation
Process Innovation
Refactoring Group
Company support orgs
Слайд 62Agency Incentives & Goals
In support of Innovation in All 3 Horizons
Disruptive
Innovation
Steve Blank
Company operates on goals and incentives
Incent mavericks, incent support, incent adoption
If supporting Horizon 2/3 is not part of Company goals & incentives then there is no real commitment to innovation
Process Innovation
Refactoring Group
Company support orgs
Positive – Financial Awards, Performance Bonuses, & Honorary Awards
Negative – You can lose product funding
Слайд 63Type of Innovation
Innovation Becomes Execution
Horizon 1 Adopts Horizon 2 & 3
Process
Execution
Steve Blank
Horizon 3 support orgs
Refactoring Group
Continuous Innovation
Success means scale
Scale requires plans, KPI’s procedures, processes, incentives
Innovation becomes execution
Disruptive Innovation
Horizon 2
Horizon 3
Horizon 1
Слайд 65Shiny Objects
Technical founder enamored with new tech (shiny object)
Abandons core Horizon
1 business
Treats Horizon 1 as the “old guys who don’t get it”
Company is still dependent on Horizon 1 until new tech gets adopted
Apple and the Mac
Research In Motion and QNX
Solution:
Can’t demoralize current product team
Need transition plan
Make sure that $’s, people, and infrastructure are in place to cross the Tech Transfer “Valley of Death”
Слайд 66Leadership is Focused on Now
Leadership managing agency for current mission
Not investing
for the long term
CEO and/or mgmt incentives all on current mission and goals
No incentives for CEO or mgmt on innovation for Horizon 2 or 3
Solution:
Need a Corporate Chief Innovation Officer who understand innovation
Need Chief Innovation Officers in all Divisions
Слайд 67Innovation Is a Buzzword
Stop using it to describe everything
Solution:
Use the Horizon
1, 2 & 3 metaphor
Understand that Incubators, Café’s, Shark Tanks, etc. are just the innovation vehicles
Lean is the methodology for acceleration
I-Corps is the way to implement it
Слайд 68Failure is Career Retarding
A failed project is to be avoided at
all costs
Projects/programs are expensive (years, lots of $’s and people)
In a Lean organization failure is part of the process
It’s acceptable because failures are MVPs
Very low cost
Happens Rapidly
It’s how we get to 50x
Pivoting from a failure gets us new learning
Слайд 69
Horizon 1 Uses “Innovation”
to Reinvent What Works
Loses sight that the
goal is to move forward, not reinvent what works
Rebuilds work already done by others and already available as a service
Doesn’t team with others
Build competing architectures
Use different source repositories, different standards, different ticketing systems, etc
Fundamental Problems:
Confusion about the goal of innovation in Horizon 1
Слайд 70Innovation Has No Incentives
No divisional incentives for Horizon 3
No divisional or
Senior-level job description for Horizon 3
No strategy/tactics for integration of Horizon 3 into operating divisions
Solution:
Develop meaningful incentives for Horizon 3
Develop written job description for Horizon 3 support
Develop strategy/tactics for integration of Horizon 3 into the rest of the organization
Слайд 71Bottleneck: The Intransigent Middle
Turning Go into No
Top of the organization says,
“Do it”
Bottom of the organization
(innovators) ready to go
Middle management kills it
Actively
Sabotage
Benign Neglect
Innovation programs die
Steve Blank
Innovation Groups Ready
Middle Mgmt Barrier
Executive
Buy-In
GO
NO
Слайд 72Why the Bottleneck?
Threat
Power, ownership, turf, prestige, pay
Confused
Job spec’s are still the
same
No training on how to support, participate
No incentives to change behavior
No penalty for ignoring it
Steve Blank
Слайд 73Removing the Bottleneck
Prove that this can work
Then: Communicate, communicate, communicate
Big idea
– shared goal/mission
Strategy – big picture of how the pieces work together
Tactical implementation
Update job specs to include innovation support
Change incentives to include innovation support
Shower those who came before with appreciation
Support those who try and fail and try again
Steve Blank
Слайд 74Sales Freezes Talking to Customers
Sales says “no one can talk to
our customers”
Valid concern of pitching new capabilities in place of ones that exist
Belief that they understand all the users needs
But Customer Discovery is not pitching new products
It’s about understanding user problems/needs and how they use current solutions
Almost impossible for a single individual to predict all of users needs now and the future
Steve Blank
Слайд 75Engineering Is Not Talking to Customers
Engineering believes innovation is about technology
Just
talks to the Subject Matter Expert, or..
To the same small group of users they’ve talked to for the past 5 years
They’re not talking to the total available market, and so they miss solving the bigger problems
Solution:
Focus the organization on understanding customer problems
Focus on solving current or future problems
Steve Blank
Слайд 77Horizon 2/3 Projects
Are Not Smaller Versions of
Horizon 1
Слайд 78Startups Are Not Smaller Versions of Large Companies
Horizon 1 Executes Known
Business Models
Слайд 79Startups Are Not Smaller Versions of Agencies
Horizon 2/3 Search for Unknown
Business Models
Слайд 80We Can Build a Process to Search
Before we Execute
Слайд 81Lean Innovation
Delivers Products and Services
that users want and need
in a fraction of the time
Слайд 82Lean Works for Everyone
Gov’t Agencies, Corporations, Startups
Слайд 83Adopted by the NSF
(National Science Foundation)
550+ teams, 1,700+ team members
Taught by
50 NSF Sponsored Universities
Слайд 84Lean for Life Sciences at UCSF
Therapeutics
Diagnostics
Devices
Digital Health
75 teams, 350 clinicians and
researchers
Слайд 85Lean at the NIH
(National Institutes of Health)
Pilot with: NCI, NHBLI,
NINDS, NCATS
Слайд 86Lean at the DOE
(Department of Energy)
LabCorps – first teams this Fall
Слайд 87Goal of I-Corps in Companies
Horizon 1 and 2
Validate that products and
services are what customers want and need
With speed and urgency
Horizon 3
Validate that products and services customers never imagined were possible
Do all with minimal resources (time, money, people) in a fraction of the time
Слайд 89Lean = 3 parts
Business Model Canvas
Part 1
Value Proposition
Activities
Resources
Partners
Costs
Слайд 90Business Model Canvas = summary of the hypotheses of how you
create and deliver mission value for the company and its stakeholders
Part 1
Value Proposition
Activities
Resources
Partners
Costs
Слайд 911. Frame Hypotheses
Frame Hypotheses
?
Слайд 921. Frame Hypotheses
Frame Hypotheses
Business Model Canvas
?
Слайд 942. Test Hypotheses
Frame Hypotheses
Test Hypotheses
Business Model
Customer Development
?
?
Customer Development is how
you search for the model
Слайд 95Customer Development
Turning the Business Model Canvas Into Facts
Слайд 969 Guesses
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Слайд 97Customer Development is
Hypothesis Testing
Слайд 983. Build Incrementally & Iteratively
Frame Hypotheses
Test Hypotheses
Build the product incrementally &
Iteratively
Business Model
Customer Development
Agile Engineering
?
?
?
Слайд 99The Minimum Viable Product (MVP)
Smallest feature set that gets you
the most …
- learning, feedback, failure, orders, …
- incremental and iterative
It is not a prototype
It is not a deployable version with the fewest features
It is whatever enables us to validate/invalidate a stated hypothesis
Early on it may be a drawing, a slide, a wireframe, clickable workflow, etc…
Слайд 100The Pivot
Definition: A substantive change to one or more of
the
business model canvas components
Iteration without crisis
Fast, agile and opportunistic
Weeks and $100K
Слайд 101Pivot Cycle Time Matters
Speed of cycle minimizes cash needs
Minimum
feature set speeds up cycle time
Near instantaneous customer feedback drives feature set
Customer
Discovery
Customer
Validation
Company
Building
Customer
Creation
Execution
Search
Pivot
Слайд 102Part 1
Agile Engineering
+
Part 2
Part 3
Elements of Lean Startup
Слайд 103Lean Startup
Part 1
Agile Engineering
+
+
Part 2
Agile Engineering
Part 3
Слайд 104How to Start an Innovation Engine- 0
Reorganize around Mission + Innovation
Each
Horizon 1 division needs a Chief Innovation Officer
Drives Continuous Innovation
Finds Horizon 2 opportunities
Starts and Funds 10x the new initiatives for MVP’s
Each Company needs a deputy director of Innovation
Runs/funds Horizon 3 incubators with I-Corps methodology
Runs open innovation incubators
Provides staff and infrastructure support for Divisional Innovation
Steve Blank
Слайд 105How to Start an Innovation Engine- 1
Identify Lean Innovation Vehicles
R&D, Engineering,
Incubators, Café’s, Accelerators, Hackathons, Open Innovation, etc.
Adopt Lean Product Development: Digital Services Playbook..
Adopt Lean Metrics: Hypotheses tested, Pivots, IRL, TRL, …
Adopt Lean Funding and acquisition: TechFar ..
Adopt Lean Pedagogy: Lean LaunchPad/I-Corps
Use Lean Mgmt processes
Agree how to “Hand-off” and “scale” small efforts (hard)
Develop organizational processes/procedures/incentives that support innovation (hard)
Steve Blank
Слайд 106Start an Innovation Engine - 2
Educate the company on Innovation
Communicate
goals
Communicate process (hard)
Everyone expects detailed specs like Horizon 1 - bad
Consolidate innovation efforts (hard)
Recruit teams (3-4 people)
Recruit mentors - one per team (hard)
Get divisional cooperation (hard)
Train the Trainers
Steve Blank
Слайд 107Start an Innovation Engine- 3
Design Programs
Emphasis on speed, urgency, evidence, pivots
1½
day “Train-the-Trainers”
6/8-week “I-Corps” programs
Investments and adoption of H1 and H2 by divisions
Run Programs
Steve Blank
Слайд 108Start an Innovation Engine - 4
Rally around a mission not theory
Pick
something everyone agrees is a good goal and congruent with the company’s mission
Legitimatize the need for exploration and exploitation
For example, for a cybersecurity software company:
“Advance and promote real-time security to protect information and outmaneuver hackers”
Steve Blank
Слайд 109Start an Innovation Engine -5
Leadership that is capable of managing the
issues associated with multiple simultaneous Horizons
Resource allocation
Incentives
Etc.
Needs to balance a culture of risk taking, speed = mitigation, quick to opportunities, receptive to innovation
Steve Blank
Слайд 110Summary
Lean Innovation Management is not about efficiency and innovation
It’s about developing
the capabilities necessary to offset competitors who may have equal or better technologies
It’s how to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments
It’s about survival in the 21st Century
Слайд 115NASA/DOD
Technology Readiness Level (TRL)
Formal Way to assess project maturity
Quantify Relative
Risks
Data Driven
Adopted by NASA, DOD, FAA, ESA…
Слайд 116NASA/DOD Technology Readiness:
Levels 1 & 2
Basic Technology Research
Basic principles
observed
Technology concept formulated
Concept
Слайд 117NASA/DOD Technology Readiness
Levels 3 & 4
Research to prove Feasibility
Experimental proof of concept
Breadboard validation in lab
Research
Concept
Слайд 118NASA/DOD Technology Readiness
Levels 5 & 6
Demo Prototype
Breadboard validation
outside the building
System demo in real-world
Research
Concept
Demo
Слайд 119NASA/DOD Technology Readiness
Levels 7, 8, 9
Deployment
System Development
System deployed
in real-world
Research
Concept
Demo
Слайд 120What Can We Do
With All This Data?
The Investment Readiness Level
Слайд 122Investment Readiness Level
We can do the same
for new ventures
Слайд 123Investment Readiness Level
We can do the same
for new ventures
Emphasis is
on data
Слайд 124Investment Readiness Level
A Formal Way to Quantify Relative Risks
Data Driven
Analog to
NASA/DOD
Technology Readiness Level (TRL)
Use IRL as a way to establish immediate
funding increments
Слайд 125Investment Readiness:
Levels 1 & 2
Hypotheses
Value Proposition summarized
Canvas hypotheses
Слайд 126Investment Readiness:
Levels 3 & 4
Problem / Solution Fit
Problem Solution
fit
Low fidelity MVP
Hypotheses
Problem/Solution
Слайд 127Investment Readiness:
Levels 5 & 6
Validate
Product/Market fit
Right side of
canvas
Hypotheses
Problem/Solution
Product/Market fit
Слайд 128Investment Readiness:
Levels 7 & 8
Validate
Left side of canvas
Hypotheses
Problem/Solution
Product/Market fit
Слайд 129Investment Readiness:
Levels 9
Metrics That Matter
Hypotheses
Problem/Solution
Product/Market fit
Left side of the canvas