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Slides are ©Essential Ideas, Inc. Photographs are copyright by their
owners All Rights Reserved
Educational Use Only May not be reproduced
`
The images are FOR YOUR USE ONLY
You MAY NOT PROJECT THEM TO OTHERS!
Use the ideas....NOT the slides
If you want to show them to your team...... Hire me! :)
I do keynotes, keynotes with breakouts and after
dinner speeches for corporations, associations, educational institutions and
governments www.tbjones.com
Disruption Innovation
Why…everything is great!
Don’t you feel like… Telephone took 75 years to reach 50 million users
Pokemon Go took 15 Days!
SomeLeaders
areworried
How can my organizationbe big and nimble?
Some are content
“Neither RedBox nor Netflix areeven on our radar screen in
terms of competition”
CEO Blockbuster2008
Peak Employment 60,00010 Years later ZERO Disruption
Self Driving
Cars
Insurance
Hotels
Parking
Gas Station
Deliveries
Auto Repair
Billboards
Healthcare
Traffic Cops!
Truck Drivers Maybe I don’t need one?
Who is the enemy? Not Godzilla but…
3,000-4000 Startups per year!Number One Barrier to
Change
“Insufficient understanding of
disruptive changes
Digital Disruption Connectivity
DISRUPTION!
Twitter@terrellbjones
From 1GIG to 10 Gig!
•4k and 8k Streaming
•AR/VR
•Gigabit broadband to home
•Very advanced IOT
Users create information InformationMade
it flow two
ways
DISRUPTION!
• Sharing• Free/Sharing• Sharing/Cheap• Free/Sharing
• New Model
• Free/Ad Based
Mobility
7.3 Billion Cell Phones 5 Billion Network Nodes
50% of Priceline’s bookings =
Mobile
2 Billion Smart Phones
I.O.T.
38 Billion by 2020
I.O.T.
How products are sold
How buildings are maintained
How bags are tracked
From Sensing To MeaningTo ActionAC Shutdown
Section 1`
Backup on Service
Dispatched
Opportunities
Torrent
Stream
Big Data
2.5 Quintillion bytes daily
Where to put it? Cloud
Instead of our own
Shared
Why is cloud important?
• Instantly available • Insanely inexpensive • Infinitely scalable
Game Changer
It’s why two guys in a startup Have as much computing power as a Fortune 500 company!
RoboticsHow products are explained How service is delivered
Drones
How regulations are enforced How products are shipped
Additive Manufacturing
Skull Parts - Here Now!Heart Valves - Coming
Jet Engine Fuel Nozzle Part Supply Chain
Manufacturer Benefits• Cheaper
• Lighter (25%)
• Stronger (5X)
• Faster (1 Year Faster to Market)
• No Inventory
• Fewer Sub Parts to Maintain (-20 Parts)
• Etc
Local 3d
Parts
Insurance
Forwarder
Warehouse
Sub Assembly
Assembler
Container Ship
Long Haul Truck
Materials Suppliers
Customs Broker
Truck Drivers
Better to be the disruptor! VR and ARHow training is delivered
Advanced AlgorithmsAlgorithms
How we get our news Who makes moneyHow contracts are
written
AIHow products are sold
A. I. How products are supported How processes are automated
AI is the new UI
Many Choices
What will it cost to be the only one?
“If you don’t like change, you’re going to like irrelevance even
less.”
“How did you go bankrupt?” “Two ways.
First Gradually
Ernest HemmingwayThe Sun Also Rises
Then Suddenly!
Technique
Technologyfollows
New Business Models
owns no vehicles
develops no content
has no inventory
owns no real estate
Tom GoodwinTechCrunch
Own the
edge
The edge has movedEdge is where the customer is
23% of store shoppers visit digital too
Apps Rule the Edge
20% Increase in Order
Size vs Counter!
Shell Pay & Save
Amazon Dash
“Your margin is our opportunity”
OPA
Other People’s Assets
PayAirline
Dealwith
Retuns
PostSale
Service
Travelocity
Bill &Collect
IssueItinerary
CreateBrand
TraditionalMarketing
Searchfor
Products
IssueTicket
BookTicket
Bill &Collect
IssueItinerary
IssueTicket
PayAirline
Dealwith
Returns
PostSale
Service
SendCustomer
toAirline
Customersfrom
Worth $1.8 BILLION
Unscale
RENT -Technology ProductionCustomers
Hemant Teneja
Traditional Hotel Brand
FindClient
FindHotels
HireStaff
ManageProperty
ProvideSecurity
Takereservation
SetPrices
EnforceStandards
Bill &Collect
HireStaff
ManageProperty
ProvideSecurity
Hotelsfindthem
MarketEnforcesStandards
SetPrices
Bill &Collect
Add amazingsoftware
But you have.... And perhaps you are not..
“There isNO step two!
Hide?
Hold it
Back?
Instagram raised$1 Billion
The day Kodak went bankrupt
Kodak invented thedigital camera!
What’s the new model?
ONIOutcomes Not Iron
Outcomes
Usage Based Insurance Uptime Based Engines
Guaranteed Crop Output
Disruption
What’s holding
youback?
50% of executives are dissatisfied with
the state of innovation in their company
Boyd & Goldberg“Inside the box”
Check the mirror Risk
vXX
I Started My Career As A Receptionist in a travel Agency - 45 years ago
Vega Travel
1st Startup
2nd Startup Sold to American Airlines
• CIO
• VP Computer Ops
• VP Applications
• Asst VP Product
• Asst VP ADS Div
• Director
18 Years AA Big Risk
• Boards
• 9 startups
• 3 went public
• 4 public companies
• 2 non profit
• Consulting company
• Venture Capitalist
• Speaker
• Author
Now I’m all in...again!
Ran outta money
`
75% of venturebacked startups
FAIL
<50% make itpast 4th birthday
Operating at full throttle
vTake the first risk! Check the mirror..again
Come together
Why can’t I buy a concept car?
Clarity
Chained to an old model?
We’ve ALWAYS done it this way
We’ve NEVER done it
that way
How far can brand extension go? Perhaps the end?
“What is dangerousis not to evolve”
Jeff Bezos
“Established organizations view disruption as a threat”
How could we do that? TheirInnovation
YourDisruption
InnovationDisruption
You can act!
Stop being disrupted - Innovate!
You don’t have to change the world to cause disruption
Many big innovations effect only one part of the model
Apple didn’t invent
They made it better
Change the plan
Choice
Control
Bundling
Simplify
Simplify The product unchanged
UI is the product Understand Context
“We have four minutes”
Contextual UX
“Turn on lights when it’s dark!”
Lessons learned
•At your favorite online bookstore
• Paperback or Ebook
6 7
3 421
Forces of disruption
5
8 9 10
What’s holding
youback?
InnovationDisruption
Stop being disrupted - Innovate!
Innovation!
“Creativity is about thinking up new things.
Innovation is about doing new things”
Theodore Levitt
They probably understand the size of the opportunity
Some will get it no matter how hard
Some can’t figure it outMost are afraid to go for it!
So, if you want success
A few ideas
Culture Team
Generating Ideas
Where do good ideas originate?
CEO
At the top?
Top had all the information
Big innovation from the top Anywhere on the chart
CEO
CFO CMO CIO
Everyone has the information
From the bottom“Innovation that
happens from top down is orderly but
dumb”
“...innovation that happens from the
bottom up is chaotic and smart”
Curtis CarlsonSRI
Bozone Layer
Stops bright ideas from moving upwards
TopDownFirst
ThenBottom
Up
Sentries Listen To Your Customers!
•The Phone Booth Is A Symbol•Every person in every job required to listen to two customer calls per month
•Must discuss root cause at staff meeting
Paul English, CTO
“At Google we learn time and time again that our users know more than we do”
-Chief Product Officer Google
Clay in the customer’s hands
60,000,000 Downloads
Behavior just like the desktop!
Look beyond what’s
immediately apparent
E-Tickets
Ourcustomers
want ticketsWhat about
receipts?
They’llneveracceptthis!
Oh Yea?
• 99% Etickets Last Month
A Self Service World “In real innovation being comfortable isn’t good”
Terry TietzenEdatanetworks
Go with your gut? Don’t bet the farm!
Prototypes
Prototype as if you were righ
t.
Listen as if you were wrong!
Selecting?
Find the best idea! A SuperNova Happened long ago
How much of y
our revenue?
Golden Innovation Ratio
Core 70%
Adjacent 20%
Transformational 10%
HBR
10 % Core
20 % Adjacent
70 % Transformational
Swifter
“..the big prizes are found when you ask a question that
challenges the corporate orthodoxy..”
-Andrew Cosslettintercontinental hotels
Who reviews ideas?
Who reviews ideas?
People in the department?
Not in the department?
Circulate ideas widely
Culture Team
Culture eats strategy for lunchDick Clark Merck
You won’t get any ideas unless...
Nurture the flame
This is NOT the Olympics
“Success isn’t permanent and failure isn’t fatal ”
-Mike Ditka
You’ve got to experiment Writer Editor
35% More
A/B/C/D Testing!
20% of Kayak is a
test
Experiment When you fail......
Kill projects...NOT peopleCoach
Early on we built a CD Rom based travel product
Spent $1 million dollars
Lost $1 million dollars
“What did you learn?”
Everyone needs a coach
“Do it right the first time!”
“Do it right the first time!”
Watch the films!As a leader....
Your WAKE is larger than you imagine
Container StoreKip Tindell
We’ve ALWAYS done it this way
We’ve NEVER done it
that way
• Support
• Amplify
• Concur
• Endorse
• Recommend
Actions & Words Matter
•Disagree
•Mimimize
•Sideline
•Devil’s Advocate
•Reject
“Never, ever, think outside the box!”
Some will leave
• Don’t like size
• Don’t like pace
• Don’t like new model That’s OK!
Culture is a contact sport
Cul
ture Team
It’s all about the team This New World requires Old World knowledge mixed with youthful exuberance
This Industry is broken Only we can fix it Messianic Zeal No Industry Knowledge No Industry Contacts
.com
Suits Industry Is Fine Doesn’t Need Fixing Slow Pace Domain Expertise
.corp.corpse
Staffing
A Balance of views
Old Dogs - New Tricks
New Dogs – Old Tricks
People who don’t fit in?
“The world wants Geniuses. It just wants them to behave like other
people!” -Gordon Moore
“Hiring is like putting together an orchestra”
Susan CredleLeo Burnett
More like a jazz band
Rock Stars hang out
with Rock Stars
Can One
Person Make
A Difference?
One Person CAN
make ALL all the
DifferenceSatya Nadella
Microsoft
Allen MulallyFord
One Persistent Guy Beat Us Doubled Their Sales!
Keep teams small
Scale is the enemy of speed
“No battle plan survives contact with the enemy”
Helmuth Von Moltke
XX
BusinessCustomer
Licensed Travel AgentBut OnLine with National Brand
Business Model• Airline Commissions 10% +
• Hotel Commissions 10+
• Car Commissions 10%+
• Advertising
• Merchandise
Grew Like A Weed
Market Forces
• Microsoft enters market
• ContemplatesBuilding Travel Into Browser
We Respond With Portal Deals
10%8%
Commission Cuts Higher Margin Products
Went Public Acqiired #3 Site & AOL
Traffic 8%5%
Commission Cuts
Reduced Costs
Added Telephone Sales
Travelocity Terminator
We Tried Everything To Kill Them
9/11• Business fell 70%
• Leveled off at -30% of previous volume
Airlines Create More Pressure
• Don’t Want Big OnLine Agencies
• Cut Commissions To ZERO
• We Instituted Service Fee
But our sales....
0
2500000
5000000
7500000
10000000
Transforming our
model
Failed To Compete!
They Didn’t!
Be flexible
“The battle is decided if the startup gets the distribution before the incumbent gets the innovation”
James JonesRetail Analyst
RBC
Innovation in a Large Corporation
BIGthe good of
• You don’t need Venture Capitalists
• You don’t need their money
• You don’t require the types of returns they will demand
• You can draw on a large pool of employees for many skills
• It’s easy to get offices, computers, phones
• You can use their big name to open doors BIGthe bad of
• You don’t get Venture Capitalists to help you!
• The corporate money comes at a price…
Endless
Numbing
Enveloping
Choking
Bureaucracy!Everyone wants to ‘help’
•Space
•Furniture
•Data Processing
•PR
•Advertising...
But they all have rules
So what
to do?
Organization
Building a Startup in a Large Corporation
Corporations are organized in ‘DIVISIONS
To Do’s
What todo with
theInternet?
President
Marketing I.T. Manufacturing
President
Marketing I.T. Manufacturing
InternetCommittee!
To Do’s
What todo with
theInternet?
President
Marketing I.T. Manufacturing
President
Marketing I.T. Manufacturing
SeparateOrganization
President
Marketing I.T. Manufacturing
President
Marketing I.T. Manufacturing
InternetInternet
Team Culture
`75% of venturebacked startups
FAIL
<50% make itpast 4th birthday
Why would your part time
team work?
Reported to CEO
•C.E.O. Provided Substantial Air Cover
•Many Wanted Our Money
•Few Wanted to Help
•His Clout Was Necessary
•Supported Risk Taking and Failure
Leader (me)
•Reported to C.E.O.
•Long Time Divisional Leader
•Had Sufficient Networking Relationship and Divisional Clout
Organization Location
• Moved to a Bankrupt Media Department Building that No One Wanted
• People Worked in Darkrooms and Sound Studios
• Took Almost One Year to Get the IT Guys to Move in as Well
• Had Spectacular Results
“Think outside the building!”
-Rosabeth Moss Kantor
Organization Location
Staffing
“We’ve found in companies that make good decisions, debate is real.”
- Jim Collins Built to Last
A Balance of views
“When two people in business always agree one of them is unnecessary!”
William Wrigley Organization Location
Staffing Funding
Funding• Budget Decided with CEO
• Little Debate Permitted
• Much Grumbling
• Later Actually Had Debate on ContinuingOrganization Location
Staffing Funding
Air Cover Great to have them help
• Their name opened doors
• Their buying power could help
• We stole great people
We hid behind them when we got in
trouble
Escape when it hurts
• Purchasing too slow and adversarial
• IT too expensive and risk averse
• Advertising didn’t know B2C
• Hiring only from inside made us uncompetitive
•
When we asked for stock options?
Eventually We sorta ran away
• We didn’t use their
• PR, Advertising
• HR Systems
• Accounting Systems
• Dress Code
But I...
• Attended staff meetings
• Board meetings
• Beat our drum, beat them off with a stick, and sucked up when it was useful!
Sylvania LED Lighting Division
“I needed someone who was a bit of a dreamer who could
navigate our system”
-Geoff Hunt Sylvania
Organization
Turned the organization on its side
President)
Manufacturing) Marke1ng) I.T.) Internet.)
President)
Manufacturing)
Marke1n
g)I.T.)
Internet.)
“We didn’t need it anymore!”
President)
Manufacturing)
Marke1n
g)I.T.)
Internet.)
President)
Manufacturing) Marke1ng) IT)
Protect it in the greenhouse
Recreateimagine Chuck Hull
Customiza
tion becomes the norm
Reimagine
Radio Controlled AirplanesDrones
Jordi Munoz
Reimagine L
“The last 25 years were all about who could build things the cheapest.
The next 25 will be all about who can make things the smartest”
Antoine van Agtmael
Lessons learned
•At your favorite online bookstore
•Paperback or Ebook Technique
Technologyfollows
It’s a different world
It’s wired Where information has found freedom
Buyers have more power than ever before
A world driven by...
Speed Simplicity Convenience
Slide copies..www.tbjones.com
Cul
ture
Team
Create a culture of innovation
Culture Bozone Layer
Experiment
Experiment Don’t punish - Learn
Slide copies..www.tbjones.com
Small TeamsBalance of Views
It is all about the team
Remember
One person
can make a difference
Look Beyond What’s Apparent
Slide copies..www.tbjones.com
Remember
Listen in a new way
Go with your gut
Slide copies..www.tbjones.com
Remember
Put your ideas to work
Your wake is larger than you
imagine
New opportunity lies where old models are crumbling
You think you have a tough job?
“You fall, you die!”Carl Wallenda
“When we come to the edge of the known world we’re standing on the shores of the infinite”
Ronald Reagan
Change is inevitable Growth is optional “The Future Is A Foreign Country.
They Do Things Differently There”
Arthur C. Clarke
`Get slides @
www.tbjones.com
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