NCBC
Readiness at Cost: The
Innovation Imperative
Lead Like an Entrepreneur
Tactics to expand your leadership capabilities by applying
entrepreneurial skills in your organization
Organizational Life
st
in the 21 Century
Copyright: N. Thornberry 1997
Corporate Mortality is very high!
Average life expectancy of all firms, regardless of size,
measured in Japan and much of Europe, is only 12.5 years.
The average life span of a multinational organization Fortune 500 or equivalent - is around 45 years.
One third of the companies listed in the Fortune 500 in 1970
for example, had disappeared by 1983 - acquired, merged or
broken to pieces.
The first S&P index of 90 major US firms was created in the
1920s. The firms on that original list stayed there for an
average of 65 years. By 1998, the average tenure of a firm
on the expanded S&P 500 was 10 years.
Source: The Living Company, Arie de Geus
The Challenge: Creating and
Sustaining Growth
80% of venture capital funded start-ups fail within the 1st 2
years
90% of all firms are unable to sustain an above-average
growth rate for more than a few years
75% of new products launched by established firms fail
In 2006 Hyundai beat Toyota in JD Power’s Quality Survey
2007 Forrester Report questions ROI of government
sponsored innovation research as creating no sustainable
value
Source: Christensen, 2004
Challenges
Global Market Place
The Need to Differentiate
Unpredictable Environments
A Premium on Innovation & Entrepreneurial
Orientation
Entrepreneurship Always involves Innovation but
Innovation does not Always involve Entrepreneurship
2007 Forrester Report claims almost no significant
value creation from Government Sponsored
Investment In Innovation R&D
A Premium on Innovation &
Entrepreneurial Thinking
Outwit
Outmaneuver
Outperform the Competition
Running faster than the other guy!!
The Innovation Ladder
EBC I
-Applying an
Entrepreneurial Mindset
-Idea to opportunity
NCBC
-Organizing for
Innovation
-Understanding Innovation -Financial footprints
-Stimulating Creative
Thinking
-“Accelerating” Innovation
-Strategic fit
-Exploring/Mining
EBC II
-Institutionalizing
Innovation
-Identifying &
removing barriers
-Developing
entrepreneurial
strategies,
processes,
systems
-Strategic fit
-Instilling
innovation as a
core value
-HR as an enabler
-Enterprise focus
Environmental Turbulence
Strategy
Formulation
Strategy
EvolutionOpportunism
Steady & Stable
Slowly Changing, Predictable,
Trends are Evident
Increasing Rate of Change
with Some Predictability,
Unforeseen Trends Appear
Rapid Change, Little
Predictability, Many Surprises
Chaotic & Unpredictable
Past Learning
Past Behavior is the Best
Predictor of Future Behavior
Current Skills & Knowledge are
Very Useful
Testing of Some of Our Basic
Assumptions about the World
Much of What we Know Today is
of Little Use for Tomorrow
Throw Out the Book
In Search of the Dragon
The Paradoxical Challenge
Large & Agile
Organization & Flexibility
Control & Empowerment
Operational Excellence & Innovation
Efficiency & Effectiveness
Budget Constraints & Opportunity Focused
Corporate & Entrepreneurial
The Anatomy of Innovation
Imagination
Something new
Action
Tangible result
Entrepreneurship always
involves innovation –
Innovation does not always
involve entrepreneurship
Some Historical Examples
Hiroshi Tanaka & Beer Cans
Canon Minicopiers
1873 San Joaquin Valley heat wave
Raisins
1849 Jean Baptiste Jolly and his angry wife
Dry Cleaning
Georges de Mestral and sticking burrs
Velcro
1849 Alkali Ike
Studded Denims
1762 John Montague addicted gambler
The Sandwich
Some Historical Examples
The Jangling Lid of a mothers tea cup
James Watt’s Steam Engine
A cat’s paw through a fence
Eli Whitney’s Cotton Gin
Benjamin Holt and planks in the soil
Caterpillar tractors
Cinchon and the plantations of Ceylon
Gin & Tonic
Some Modern Examples
Starbucks
BMW I-Drive
PDA - Cell phone
Patterned or Random?
Meet with your assigned colleagues. Study each
of the aforementioned examples.
Are these examples of luck or are there certain
patterns to these discoveries?
If you believe there are patterns, what are they?
Can these patterns be learned by others in order
to stimulate greater innovation? If so, how?
What can managers do to help induce the
pre-conditions for innovation?
IDEO Corporation
Serial Innovation
“Things I wish I hadn’t said”
“The telephone has too many shortcomings to be seriously considered as a means of
communications” – Western Union internal memo (1876)
“We don’t like their sound and guitar music is on the way out”
– Decca Recording as reasons for rejecting the Beatles (1962)
“Who the hell wants to hear actors talk?”
– HM. Warner, Warner Brothers Studios (1927)
“640 K ought to be enough for anybody”
– Bill Gates (1981)
“Louis Pasteur’s theory of germs is ridiculous fiction”
– Pierre Pachet, Physiology Professor (Toulouse, 1872)
“I think there is a world market for maybe 5 computers”
– Thomas Watson (IBM Chairman, 1943)
“There is not the slightest indication that nuclear energy will ever be obtainable. It
would mean that the atom would have to be shattered at will”
– Albert Einstein (1932)
“Everything that can be invented has been invented”
– Charles H. Duell, Commissioner, U.S. Office of Patents (1899)
5 Generic Patterns
Subtraction
Philips DVD Player
Multiplication
Gillette Razor
Division
Removable Car Radio
Task Unification
Windshield Antenna
Attribute Dependency
Light sensitive lenses
Application Exercise
Using the techniques from the “Sweet Spot”
reading, think of a current process, operation,
logistics chain, or business model.
Apply one or more of the techniques to this
offering in order to stimulate your innovative
thinking abilities.
Choose the group’s favorite ideas and prepare a
short presentation for plenary
If implemented, what kind of impact do think this
innovation would have on the organization?
A Definition of Entrepreneurial Leadership
The Identification, Development & Capturing
of Opportunities within an existing
organization that requires:
Changes in the pattern of resource deployment for the
Creation of new capabilities
Resulting in new possibilities for market positioning and
Enhanced long term value of the firm to its owners and
employees
Focusing Entrepreneurial Energy
Internal
Activist
Catalyst
External
“Miners”
“Explorers”
(Value Chain)
(Market)
“Accelerators”
“Integrators”
(Unit)
(Enterprise)
General
Management Skills
High
Different Types / Different Requirements
High
Accelerator
Personal
Control
Integrator
Miner
Explorer
Low
Organizational Commitment
High
Entrepreneurial Leader Profiles
John Kelley – Varitrust
Alfred Weichselbaum – Siemens Medical
EBS (Entrepreneurial Behavior Scale)
Behavioral Studies
Very Few
One Example: South Eastern Utility
» 30,000 Employees, $2.847 Billion
» Deregulation, Global Competition
» “Transformation To an
Entrepreneurial Organization”
Study Continued
360 Degree Management Survey
102 Managers
833 Subordinates
Subset of 11 “Corporate Entrepreneurial”
Behaviors Included in the Survey
(JBV 1997)
Corporate Entrepreneurship Behaviors
Efficiently Gets Proposed
Actions Through
Bureaucratic Red Tape and
into Practice
Displays an Enthusiasm for
Acquiring Skills
Quickly Changes Course of
Action When Results Aren’t
Being Achieved
Encourages Others To Take
The Initiative for Their Own
Ideas
Inspires Others To Think
About Their Work In New and
Stimulating Ways
Devotes Time To Helping Others
Find Ways To Improve Our
Products and Services
Goes To Bat for The Good Ideas
of Others
Boldly Moves Ahead with a
Promising New Approach When
Others Might Be More Cautious
Vividly Describes How Things
Could Be in the Future and What
Is Needed to Get Us There
Gets People to Rally Together to
Meet a Challenge
Creates an Environment Where
People Get Excited about Making
Improvements
EBS Themes
Innovation / New Idea Generation
and Support
Continuous Learning
Bureaucracy Busting / Circumvention
Encouragement of Risk Taking
Vision
Impact on Subordinate Satisfaction
Entrepreneurial Leadership Behavior
Scores Significantly Related to



External Customer Satisfaction
Employee Satisfaction
District Contribution Margins
Remember
A little difference can make a
difference