Applied Innovation for the Unorganization
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Many organizations are not designed to innovate effectively or fast. They lack the necessary processes, talent, risk tolerance and leadership alignment, as well as a culture that encourages, rewards and promotes innovation. In order to innovate effectively, the traditional organizations need to embrace the “Unorganization” structure to meet today’s market demands. Capgemini’s new and tested global Applied Innovation Exchange network, breaks the traditional model; instead taking a multi-party collaborative approach and balancing external and internal thinking to assist organizations in cultivating and applying innovation within their enterprises, and specifically to their most strategic business processes. Presented by Lanny Cohen, Group Chief Technology Officer, Capgemini at Sogeti’s VINT Symposium Learn more on Capgemini’s Applied Innovation Exchanges: https://www.capgemini.com/applied-innovation-exchange
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Applied Innovation for the Unorganization
- 1. Applied Innovation for the Unorganization Lanny S. Cohen | Group Chief Technology Officer | Capgemini
- 2. Check your pre-conceptions at the door
- 4. Startup investment in 2015 $7.5 billion 21% 905 deals with startups Total business deals 2015 SOURCE: Thomson Reuters data published by PwC
- 5. startups in the San Francisco Bay area 17,000+ of startups fail in the first year new innovation centers opened over the past 6 months in 20 countries 56 80% SOURCE: Thomson Reuters data published by PwC
- 6. Annual spend on R&D $650 billion of new consumer product launches fail are too slow to market 85% 90% SOURCE: Thomson Reuters data published by PwC
- 7. This is a profoundly uncertain, perpetually disruptive marketplace
- 8. • 52% from the year 2000 no longer exist • The iPhone = extinction of 27 business models • Uber is 7 years old, valued at over $66 billion • Snapchat valued at $10 billion after 4 years
- 9. Faster Pace Source Impact Disruptive and continuous innovation is the new normal
- 10. Culture Talent Process Risk Tolerance The Traditional Organization Hierarchical decision-making Efficiency over innovation Failure is not allowed Innovation through R&D Most organizations are ill-equipped to foster innovation
- 11. Ideas are currency. Knowledge is capital. Innovation, brilliantly applied, is gold.
- 12. Speed Scale Safety Certainty 4 design principles are needed to address innovation today
- 13. Planned Measured Managed Discipline Outcome Innovation is not a random act
- 14. Business and IT alignment Business model innovation and growth Buyer sophistication and state-of-readiness Getting started Innovation is still not the whole story
- 15. Innovation without ironclad application is a bankrupt proposition
- 16. Discover Devise Deploy Sustain A vigorous framework is needed to achieve Applied Innovation
- 17. Venture funds Academia Start-ups Private equity firms Partners Innovation experts 3rd party R&D A multi-disciplinary and open ecosystem
- 18. Highly Collaborative Performance Focused Open in Design Domain expertise Proximity Experiential based facilities
- 19. Inform Inspire Incite Ignite Emotional engagement
- 20. "Digital Dynasties: The Rise of Innovation Empires Worldwide" by Capgemini Consulting & Altimeter Key innovation center objectives drive Applied Innovation Partnering with Ecosystem 51% Product Innovation/Concept Development 28% Enhance Customer Experience 13% Improve Operational Efficiency 3% Others 5%
- 21. The risks are real, yet the opportunities are immense
- 22. Culture Talent Process Risk Tolerance Engaging and open Applied Innovation as core competency Reward experimentation Agile and fast The Unorganization The unorganization enables today’s Applied Innovation
- 24. Established organizations adapting to change
- 25. Framework Ecosystem Exchanges Insight Engagement Technology COEs Applied Technology Platform Technology Consulting Group IP Protections Innovation Ecosystem Research & Innovation Knowledge Management and Collaboration Marketing Governance Platform Infrastructure Applied Innovation at Capgemini Applied Innovation Exchange (AIE)
- 26. Looking Ahead Pace Accelerates Experience Economy Cognitive Thinking Machine to Machine/ Automation Collaborative Future Trust Economy Processes on the Fly Analytics Everywhere Millennials Dominate Need to act Define Immerse Calibrate Align Engage Experiment Execute
- 27. Applied Innovation changes everything
- 28. The information contained in this presentation is proprietary. © 2016 Capgemini. All rights reserved. www.capgemini.com About Capgemini With more than 180,000 people in over 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2015 global revenues of EUR 11.9 billion. Together with its clients, Capgemini creates and delivers business, technology and digital solutions that fit their needs, enabling them to achieve innovation and competitiveness. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model. Rightshore® is a trademark belonging to Capgemini
Editor's Notes
- There are plenty of cool new technologies in the market today These are seen in typical innovation centers which generate a lot of excitement and buzz But none of this matters
- In 2015, Corporate venture groups invested $7.5 billion in 905 deals to fund startups, accounting for 13% of all venture capital dollars and 21% percent of all deals This level of investment has not been seen since the dot-com bubble. The money is there, but all the investments in labs and venture funds have yet to prove they have any value today. Which brings the question, is it possible to do corporate venturing in a big organization – are they too risk averse and too slow in their decision processes?
- Innovation centers are popping up everywhere -- just in the last six months 56 innovation centers opened in 20 countries. There are over 17,000 startups in the San Francisco Bay area alone and that’s not considering other growing hot spots like Tel Aviv, Singapore, Dubai and more. Everyone wants to get into the startup market, but how do you sort through this mound of startups to find exactly the right start up for your specific projects/needs? Good luck trying to do this on your own with 80% of startups failing in the first year.
- a) Leading companies spend over $650 billion on R&D every year. b) Despite this investment, over 85% of new consumer product launches fail. c) In addition, 90% of companies consider they are too slow to market.
- 52% of Fortune 500 companies from the year 2000 no longer exist We are in a marketplace where Billion dollar companies can suddenly disappear, The introduction of the IPhone in 2007, resulted in the mass extinction of 27 business models On the flip side, new innovative companies can appear just as quickly Facebook is a 12-year old enterprise, while Uber is only 7 years old. Snapchat is now valued at upwards of $10 billion only four years after its birth
- a) Faster Pace: Today innovation cycles are measured in days and weeks, not years. b) Source: Longstanding business models are shifting c) Impact: Better payoffs for customers – products, and services are better targeted to the customer’s needs d) At the same time, companies don’t have the processes or the culture to cope with it.
- Most companies are ill-equipped to act, achieve, and sustain innovation– primarily because they lack the following: Talent: In the traditional organization, hierarchical decision-making prevents agility, speed, and creativity; pro-active, bottom-up innovation is lacking. Culture: Few CEOs pursue innovation as consistently as operational efficiency Risk Tolerance: Traditional organizations are adverse to risk – failure is not allowed. Traditional organizations are built to be stable rather than disruptive in nature. Process: R&D is the main innovation engine – it rarely come up with pioneering innovation despite the abundance of resources it has at its disposal and when innovation comes along they often don’t know how to employ it and scale it.
- 4 design principles are needed to make innovation stick Speed Scale Safety Certainty
- Innovation is not a random act Need to be more prescriptive Planned Measured Predicted
- What we see: Imbalances exist between business and IT motivations Business Model innovation is moving to the foreground Interest is strong, but buyer sophistication and state-of-readiness to act are low Action and impact are in high demand, but organizations struggle with how/where to begin
- A vigorous framework is needed to foster the exchange and application of innovation. allowing exploration and experimentation in a safe, secure and immersive environment leveraging the latest tool suites and methods, accelerators and design thinking all underpinned by a robust governance model Discover Devise Deploy Sustain
- A multi-disciplinary ecosystem is needed to drive Applied Innovation. There must be a collaborative, co-creative approach to build prototypes, proof-of-concepts and demonstrate business value. Ecosystems thrive on the energy that comes from sharing ideas. To create this energy you need to combine different types of people, partners, and even ecosystems together. Innovation experts Partners Academia Start-ups 3rd party R&D Venture funds Private equity firms
- You also need an experience-based innovation facility where you can make it all happen. One that features: A highly collaborative environment Performance-focused innovators An open design Multiple party participation during the innovation process A geographical location in close proximity to other ecosystem players.
- Emotional Engagement Inform Inspire Incite Ignite
- 51% of new innovation centers list “partnering with an ecosystem” as their top priority. They are starting to realize the value in partnering with relevant startups and ecosystem players, rather than simply gaining access to technology. Also worth noting is a focus on enhancing the customer experience
- The “Unorganization” is structured to meet today’s market demands Talent: Innovation becomes an organic part of the organization Culture: Business Model innovation moves to the foreground, rebalancing the decision-making proces Risk Tolerance: Experimentation is built into the culture – not afraid to fail Process: Ecosystems constructed to foster innovation collaboration
- New Unorganization model leaders: Uber Uber digitally link drivers with people needing rides. Uber's commission revenue is over two billion dollars on ten billion in gross spending by passengers. Airbnb Airbnb matches property owners who wish to rent out to travelers. Airbnb collects a commission that averages 11% on room rents. With nearly a billion in annual revenue, AirBNB is being valued at around 25 Billion Amazon Amazon’s biggest impact has been in the hosted storage and processing business known as Amazon Web Services. Amazon has also dominated the cloud computing sector. Revenue from Cloud Computing exceeds IBM, Google, and Microsoft combined Google / Facebook / Linkedin / Zillow Internet companies that offer information and services for free, and make their money by selling targeting advertising, or better positioning within search results.
- More established companies are forging new disruptive business models as well. For example: GE Digital Transforming a 130-year-old traditional company into a digital company Changing fundamental DNA in people, processes, systems, and tools Innovating with customers quickly and frequently Implementing rapid iteration –pushing the envelope every 30 to 60 days Siemens Today Siemens is utilizing knowledge exchange platforms, idea competitions and research partnerships as a unique approach of open innovation. Employees can openly discuss developments together, identify the best ideas, and transform their concepts into market-ready products. Siemens’ Innovative Ventures departments not only partners with Startups but creates its own. The Bridge by Coca-Cola A unique Commercialization Program for startups Startups range from early stage to growth startups Software solutions are ready to commercialize Six-month program provides tangible commercial guidance, plus opportunity to pilot within Coca- Cola and chance to license product to Coca-Cola and/or its Partner Singapore Government Singapore has earned a reputation as an innovation hub at the cutting-edge of modern business. A vast new entrepreneurial ecosystem is being created in Singapore, which aspires to be the Silicon Valley of Southeast Asia. With unemployment at 1.9%, Singapore is striving to be the first Smart Nation powered by big data and analytics technologies, and next-generation connected and sensor networks. For example: A network of sensors, cameras and GPS devices embedded in taxi cabs track traffic, predicting future congestion and alerting drivers to alternate routes. New technologies detect and treat early gastric cancer; tele-health rehabilitation systems transmit data wirelessly through sensors attached to patients’ limbs as they carry out therapy in their homes. With unemployment at 1.9% and the world’s highest per capita income rates has turned into the Smartest nation and true hub of innovation.
- a) A robust process is needed to manage Applied Innovation, allowing its employees to explore and experiment in a safe, secure and immersive environment that is designed to foster the exchange and application of innovation.
- Looking Ahead