The document discusses measuring the impact of innovation on business and outlines Scott Bales' framework for innovation which includes establishing the proper context, culture, capabilities, and collaboration to enable successful innovation. It provides examples and tools for customer-centric ideation, developing ideas into opportunities through hypothesis testing and customer discovery, and measuring innovation returns over time to achieve business goals.

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Measuring
Innovation
Innovation Labs Asia
Measuring the impact
innovation has on the business
Scott Bales
Managing Director
@scottebales
@scottebales
/scottebales

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WhatWe’llLearn Today
Us & You
Setting The Scene
Customer Centric Ideation
Idea to Opportunity
Opportunity Value
Portfolio of Options

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Us

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Keynote speaker,
thought leader & author
of Innovation
Built Innovation & Digital Ventures
worth Half a Billion Dollars in 15 years
A team with over 30 years of experience
Scott Bales
Business Manager
Nicki Darren
Account Manager

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Working with over 100 companies in
various stages of the innovation journey

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You

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YOUR SKILLS ARE KEY
TO YOUR SUCCESS
NONE 1 2 3 4 AVG 6 7 8 9
ROCK
STAR
BUSINESS MODELING
PERSONA DEVELOPMENT
CUSTOMER DISCOVERY & DEVELOPMENT
MINIMUM VIABLE EXPERIMENTS
MEASURING PRODUCT / MARKET FIT
PIVOT VS PERSEVERE
PITCHING OPTIONS
PIPELINE MANAGEMENT

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Setting The Scene

10. “Give a Man a Fish,
and You Feed Him
for a Day. Teach a
Man to Fish, and
You Feed Him for a
Lifetime”

11. 99%
IS IT THE RIGHT IDEA?
FAIL
OF VENTURES

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WHAT MOST PEOPLE THINK WHAT SUCCESSFUL PEOPLE KNOW

13. Principles of Lean Innovation
Accept that you know Nothing
Neither you, nor the customer, may know what the product requirements are until after they’ve played with the
product
Test Smart
Failure friendly firms don’t fail, they either confirm or reject hypotheses
Measure Smart
Lean Enterprises measure the right things
Iterate at Speed
Lean Enterprises don’t throw good money after bad. But neither are they fickle. Whatever the case, they pivot or
persevere quickly

14. SUCCESS ISN’T LINEAR

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Over Invested in music
merchandise during digital shift
Invested in online sales to
adapt to change in buying
behaviour
Outsourced online sales to
direct competitor
Developed its own
e-reader
Incumbency does not guarantee a
golden ticket to the future
Some are gone, some have evolved
VS

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Financial
Services
Insurance
Education
Media
Healthcare
It takes weeks, not years,
of inaction to be disrupted
Key industries
under threat
“The increasingly crowded unicorn club”
Source: CB Insights

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The Barriers to successful innovation
are the absence of:
Little to no consideration
of available resources,
goals & restrictions
Corporate structure and
environment do not
support creativity,
ideation
Lack of talent to
exploring and execute
ideas with minimal waste
Confined paradigm without
complementing skills for
faster growth
Context Culture Capabilities Collaboration

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4Cs model
Capability
Culture
Context
Collaboration
The building blocks
of value creating
Innovation
A series of foundational
efforts to enable a
strategic vision

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CONTEXT“There is no quick wins for business, it takes
years to become an overnight success”

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Establish the
parameters of your
innovation success
New
Capabilities
Existing
Capabilities
Existing Market New Market
HORIZON 1
Performance Zone
HORIZON 2
Transformation Zone
HORIZON 3
Incubation Zone
Create disruptive
offerings to new
market
Serve new market with
existing offerings
Create new offerings to serve
existing market
HORIZON 1
Productivity Zone
Existing offerings to
existing market
What are the foreseeable
goals & objectives?

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Understand that
results are not
achieved overnight
“Incremental change is
better than ambitious
failure. Success feeds on
itself.”
Existing Market New Market
HORIZON 1
Performance Zone
HORIZON 2
Transformation Zone
HORIZON 3
Incubation Zone
Create disruptive
offerings to new
market
Serve new market with
existing offerings
Create new offerings to
serve existing market
HORIZON 1
Productivity Zone
Existing offerings to existing
market
New
Capabilities
Existing
Capabilities
HORIZON 1
Performance Zone
HORIZON 2
Transformation Zone
HORIZON 3
Incubation Zone
What can we have in
5 years time?
How can it
be better?
What else
can be do today?
HORIZON 1
Productivity Zone
Is it
working?
HORIZON 1
Performance Zone
HORIZON 3
Incubation Zone
Create disruptive
offerings to new
market
Existing offerings to existing
market
Increase
in
Value
over
tim
e
HORIZON 1
Performance Zone
HORIZON 3
Incubation Zone
ROI 0-12 months
ROI 36-72 months

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Understand that
results are not
achieved overnight
“Incremental change is
better than ambitious
failure. Success feeds on
itself.”
Existing Market New Market
HORIZON 1
Performance Zone
HORIZON 2
Transformation Zone
HORIZON 3
Incubation Zone
Create disruptive
offerings to new
market
Serve new market with
existing offerings
Create new offerings to
serve existing market
HORIZON 1
Productivity Zone
Existing offerings to existing
market
New
Capabilities
Existing
Capabilities
HORIZON 1
Performance Zone
HORIZON 2
Transformation Zone
HORIZON 3
Incubation Zone
What can we have in
5 years time?
How can it
be better?
What else
can be do today?
HORIZON 1
Productivity Zone
Is it
working?
HORIZON 1
Performance Zone
HORIZON 3
Incubation Zone
Create disruptive
offerings to new
market
Existing offerings to existing
market
Incubated Idea eventually
replaces existing core

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Examples of
each Horizon
New
Capabilities
Existing
Capabilities
Existing Market New Market
3D TVs
Internet Service
Enabled TVs
Flat Panel
TV
Flat Panel
TV

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Stable
Environment The Connected
Company
Volatile Environment
Pod
Reproduced
Network
forms
Platform
Emerges
A Pod is born

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Innovation
Champion
& Challenger
Instruments to
guide the
innovation journey
Vehicles
& assets to
innovate
Plan resources to support
Innovation for it to take place

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CULTURE
“Culture eats strategy for breakfast”
P.S: and it’s not about wearing jeans

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Start with
why
Grassroots-level
empathy
Lessons not
failure
Mobilise a culture of curiosity,
structured inquiry and hypothesis design
Experimentation
Culture:
Customer-Centric
Culture:
Purpose
Culture:

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CAPABILITY“Ideas without actions are worthless”

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24.87% CAGR for cards &
payments industry
60% YOY growth in internet
users
Wing : pioneer of Mobile
Money in Cambodia
significantly contributed to
nation’s economic growth

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Develop the ability to innovate & execute
great ideas, like a startup, with “low wastage”
Apply best practise
frameworks
across problem discovery
and validation
Build internal talent
& champions
and enable them with resources to
pursue opportunities
Account for the
value of innovation
to commercialise the Idea
with fewer resources
Quantify Success Explore multiple options
Rapid validation

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“Nobody is as smart as everybody”
COLLABORATION

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Community building beyond corporate boundaries into
complementary, challenger and synergy domains
Developing
Canvas and spaces:
to embrace technology
advancements and partner
strengths
Value chain &
ecosystem exploration:
to enable a higher purpose
Establish new
market activation:
and customer growth
models normally only
possible for startups

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THE JOURNEY

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The Innovation Journey
• Barriers to Innovation
• Persona Modelling
• Hypothesis Design
• Experiment Design
• Customer Development
• Innovation Culture
• Business Models
• Opportunity Framing
• Peer Review
Equipping teams with consistent proven methods for innovation
Innovation
Practitioner
Innovation
Bootcamp
Innovation
Accelerator
• Product Market Fit
• Advanced Experiment
Methods
• Experiment Design & Metrics
• Scaling Problem/Market Fit
• Opportunity Identification &
Validation
• Venture Accounting model
• Pitch a Venture
• Growing A User Base
• Support Frameworks
• Can we measure demand
prior to launch?
• How does the customer
want to experience the
product or service?
• Rapid prototyping and
acceptance testing
Who & How Should We
Innovate?
Should & Can we solve this
problem?
Is There A Problem Worth
Solving?

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Returns
Short term priorities that lead to
long-term Innovation Goals
Collaboration
CapabilityCulture
Context
Innovation
Acceleration
Innovation Bootcamp
Innovation
Practitioner
Executive Inspiration
Session
Inspiring action
around
opportunity,
threats &
barriers to
innovation.
Horizon 1 | ROI in 0-12 months
12 weeks
acceleration
program
3 days Innovation
practitioner workshop
5 days
bootcamp
6 weeks situational
Analysis Report
Proof of
Value
Proof of
Concept
Enabled
Innovation
Innovation
Education
Discovery
& Planning

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How does success looks like in 60 months?
Incremental growth in the Innovation value from day 1
Basic
Innovation
Proof of
Value
Bootcamp Proof of
Concept
Basic
Innovation
Proof of
Value
Bootcamp Proof of
Concept
Horizon 2 | Break-out categories
Horizon 3 | Future Categories
Horizon 1 | Current categories
Basic
Innovation
Proof of
Value
Bootcamp Proof of
Concept
Returns
12 36 72
Time

40. Ⓒ Innovation Labs Asia
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Reaping tangible benefits in the long-run
Incremental growth in the Innovation value from day 1
Basic
Innovation
Proof of
Value
Bootcamp Proof of
Concept
Basic
Innovation
Proof of
Value
Bootcamp Proof of
Concept
Horizon 2 | Break-out categories
Horizon 3 | Future Categories
Horizon 1 | Current categories
Basic
Innovation
Proof of
Value
Bootcamp Proof of
Concept
Returns
1
2
36 72
Time
Returns
Years

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Customer Centric Ideation

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customer development mantra
YOU ARE NOT THE CUSTOMER
ONLY THROUGH OBJECTIVE
RESEARCH CAN WE UNCOVER
PEOPLE’S PAINS, NEEDS, AND GOALS,
IN THEIR CONTEXT

43. WHAT CUSTOMER?
1 2 3 4
which customer do I start with? CUSTOMER

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45. PERSONA
WHAT’S THEIR CONTEXT?
WHAT ARE THEY TRYING TO ACHIEVE?
HOW CAN YOU ADD VALUE?
EXERCISE

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Facts
Factual information about your target customer
Pain
State the problem you believe your target customers have, that
your solution intends to solve for
Behavior
Existing behavior they exhibit now, because they don’t have your
solution
Goals
What goals are they trying to accomplish through the behavior,
that your solution will do better?
GREG
37 years of age, married(7 years).
Two kids (3 & 5)
Employed by Coca-Cola to manage regional
marketing
Tech savvy, loves his Gadgets. Always keen
to learn more
Reads The Economist Online
Enjoys the outdoors with his kids
Regular traveller in the region, both work
and personal
Greg is a bit of a perfectionist, so he has tried multiple video blog solutions
But hasn’t found any that allow him to express himself in the way he wants.
He finds each tool hard to earn, and really isn’t sure if he is getting the best
out of each tool
He has tried reading through forums, but finds it difficult reading a tutorial
and applying it to his material
Has been reading video blog tips in the hope of creating is own travel video blog
Purchased a pirated copy of Final Cut Pro to explore, but quickly purchased a license
Always has his video camera out when traveling, both on work travels and personal
travel
Purchased the domain www.gregsworld.com
Has tried Vimeo, Wordpress and TypePad in attempts to create a blog
Greg loves to travel, he loves to explore new places, culture, people and food
Greg would love to share his experiences with friends, family and colleagues

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idea to
opportunity

48. CUSTOMER & PROBLEM
ASSUMPTIONS
MVP
VALIDATED LEARNING
CUSTOMER DISCOVERY
PIVOT OR PERSEVERE
BRAINSTORMING
SOLUTION

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Customer Who is your Customer? C1
Problem What is the problem? P1
Solution Define the Solution S1
Assumptions Riskiest Assumptions R1
Experiment Experiment Type E1
Experiment Metrics
Success Criteria Experiment Sample 50%
Success Metric
Results X/X
PASS/FAIL
Decision Pivot or Persevere
Learning What insights help you define your next action?
TEMPLATE: bit.ly/ilametrics

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Facts
Factual information about your target customer
Pain
State the problem you believe your target customers have, that
your solution intends to solve for
Behavior
Existing behavior they exhibit now, because they don’t have your
solution
Goals
What goals are they trying to accomplish through the behavior,
that your solution will do better?
TEMPLATE: innovationlabs.asia/personas

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Facts
Factual information about your target customer
Pain
State the problem you believe your target customers have, that
your solution intends to solve for
Behavior
Existing behavior they exhibit now, because they don’t have your
solution
Goals
What goals are they trying to accomplish through the behavior,
that your solution will do better?

52. Ⓒ Innovation Labs Asia
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Facts
Factual information about your target customer
Pain
State the problem you believe your target customers have, that
your solution intends to solve for
Behavior
Existing behavior they exhibit now, because they don’t have your
solution
Goals
What goals are they trying to accomplish through the behavior,
that your solution will do better?
Facts + Behavior = Customer

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Facts
Factual information about your target customer
Pain
State the problem you believe your target customers have, that
your solution intends to solve for
Behavior
Existing behavior they exhibit now, because they don’t have your
solution
Goals
What goals are they trying to accomplish through the behavior,
that your solution will do better?
Pain + Goals = Problem

54. Ⓒ Innovation Labs Asia
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Facts
Factual information about your target customer
Pain
State the problem you believe your target customers have, that
your solution intends to solve for
Behavior
Existing behavior they exhibit now, because they don’t have your
solution
Goals
What goals are they trying to accomplish through the behavior,
that your solution will do better?
(Behavior + Goals) - Pain = Solution

55. CUSTOMER PROBLEM SOLUTION
Facts + Behavior
= Customer
Pain + Goals
= Problem
(Behavior + Goals) - Pain
= Solution
hypothesis design

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So how does it scale?

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Opportunity value

58. Acquisition
Getting People to come to your site
Activation
Getting people to sign up for anything that could lead to a repeat visit
Retention
Getting users to become active
Referral
Getting Users to ‘spread the word’ about your site
Revenue
Monetizing active users
TERMINOLOGY

59. METRICS MODEL
@davemcclure

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STOP adding features
Find the ONE THING users LOVE
How? TAKE SHIT AWAY
When they SCREAM, you’ve found it
Then bring it back… only better
Tip: Kill a Feature EVERY WEEK
RETENTION

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Field Observation

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Coffee Shop Test

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Role Play

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Facebook Page

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Landing Page

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METRICS MODEL
@davemcclure

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User State Conversion % Est. Value
Acquisition Visit Site 100% $0.01
Acquisition Doesn’t Abandon 70% $0.05
Activation Happy 1st Visit 30% $0.25
Activation Email/Blog/RSS 5% $1.00
Activation Account Signup 2% $3.00
Retention Email open/RSS view 3% $2.00
Retention Repeat visitor 2% $5.00
Referral Refer 1+ users who visit site 2% $3.00
Referral Refer 1 + users who activate 1% $10.00
Revenue User generates minimum revenue 2% $5.00
AARRR METRICS MODEL
TEMPLATE: bit.ly/ilametrics

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Value of
acquisition $0.06
Value of
activation $4.25
Retention
Value $7.00
Referral
Value $13.00
Revenue/unit
sold $5.00
Revenue/u
nit sold
Exp # Acquisition Activation Retention Referral Revenue Cost
Acquisition
Value
Activation Value
Retention &
Referreal
Revenue Total Value ROI
1 7 6 4 5 0 50 0.42 25.5 180 0 205.92 312%
2 7 6 4 5 0 50 0.42 25.5 180 0 205.92 312%
3 8 9 7 6 1 51 0.48 38.25 260 5 303.73 496%
EXPERIMENT METRICS
TEMPLATE: bit.ly/ilametrics

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OPTIONS PORTFOLIO

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Enabled Innovation
Executive
Advisory
Strategic
Advisory
Field
Research
Product
Development
Rapid
Prototyping
Market Entry
Strategy
Disruptive
Innovation

71. “Give a Man a Fish,
and You Feed Him
for a Day. Teach a
Man to Fish, and
You Feed Him for a
Lifetime”

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It is not the strongest of the species that
survive, nor the most intelligent, but the
ones most responsive to change.
Start your innovation journey
with Innovation Labs Asia, today
/ Charles Darwin
Contact Us:
Innovation Labs Asia
hello@innovationlabs.asia
Lvl 4, 101c Telok Ayer Street, Singapore, 068574
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