This document discusses strategies for reinvigorating institutionalized development organizations by adopting practices from startups. It argues that large companies lose their startup energy over time and provides three "genes" or strategies for change: 1) Creating belief in the vision, 2) Reducing unnecessary processes and documentation, 3) Adopting a development cell structure to increase flexibility, autonomy and responsiveness. The document outlines specific tactics under each gene and provides examples of how they have successfully transformed R&D organizations to become faster, more innovative and output-focused like startups.

1. PLAYING TO WIN
Reenergizing Institutionalized Development
Jeffrey Schmidt
Vice President, Research & Development
Carl Zeiss MeditecCarl Zeiss Meditec

2. WARNINGWARNING

3. Los Angeles
Salt Lake CityOperations Salt Lake City
Washington DC
Portland
Operations
R&D
Service-Consulting
Singapore
Syracuse
IT
Sales & Marketing
San FranciscoBusiness Management
OBLIGATORY BACKGROUND

4. When you hold nothing back …
When there is no thought of what I might lose …
When there is no concept that I could fail …
Your singular focus is on achieving the GOALYour singular focus is on achieving the GOAL…
DEFINITION: WHAT IS “PLAYING TO WIN”?

5. “Consistent and organized
pattern of behaviour or
activities (established by law or
custom) that is self-regulating) g g
in accordance with generally
accepted norms.”
Might be how it feels,Might be how it feels,
but it is not today’s topic!
DEFINITION: WHAT IS AN INSTITUTE?

6. DO I WORK FOR AN INSTITUTE?

7. AM I INSTITUTIONALIZED?

8. ‘ that’s OK ’… that s OK …
‘… enjoy the rest …’
SO IF YOU ARE HAPPY WITH THE INSTITUTE …

9. IF YOU ARE READY FOR CHANGE …

10. Speed and adaptability of a start-up
with the resources of a market leader
“… all the strengths
and none of the
weaknesses …
“If only we had their
energy, passion,
“If only we had their
budgets, customers,
we could create …commitment, speed, ...” channels, portfolio, ...”
A giant Chihuahua?
==++
A giant Chihuahua?
The Start Up The Market Leader
MY THREE DECADES EXPERIMENTATION …

11. NO …
HAVE YOU FIGURED IT OUT?

12. NPD from 34 months 16 months 9 months
New products exceeding sales and profit targets
4x improvement in field and manufacturing quality4x improvement in field and manufacturing quality
The ‘preferred’ R&D centers for Product Mgrs
6x product output with the same resources
4x more scientific innovation
A hi i B d & CEO fidAchieving Board & CEO confidence
Reestablishing sales confidence
BUT SOME SUCCESS HAS BEEN ACHIEVED …

13. WHERE TO BEGIN?

14. Large Enterprise
SMESME
Protecting the GOAL
Start-Up Playing to SCORE
Decline
Playing to WIN
SURVIVESURVIVE
WE ALL BEGAN A START UP, WHAT HAPPENED?

15. CAN WE BREAK THIS CYCLE?

16. THREE START-UP GENES …

17. We are all part of a business
ecosystem …
You cannot create a
sustainable change ifg
dependent functions do
not change with you.
WORD OF CAUTION …

18. BELIEF … CONVINCING THE ORGANIZATION

19. BELIEF … YOU HAVE TO EARN IT

20. WHAT ARE THEY GOING TO BELIEVE?

21. I h t I d iIn what I am doing …
In the people I workIn the people I work …
YOU HAVE TO MAKE IT PERSONAL …

22. Two approaches …pp
Application:
Share a great enemy
Application:
Saved family member
Family has the disease
Help not hurt
Application:
Community business v competition
Internal attitudes towards team
Share a great cause
“I am tired of losing!”
BELIEVING … “I MAKE A DIFFERENCE”

23. The ‘Full’ 360° view …
Be consistent Positive energy
Walk the talk Have small wins
BELIEVING … IN THE TEAM

24. SORTING OUT THE DISBELIEVERS …

25. re
Implementation tools:
Title or role change
Performance Plan
recultur
re…”
Reviews (formal/informal)
Individual development plans
U d th t l th t il bl
donfutu
ngetusther
The 9 Box
Used the tools that were available,
sometimes differently than how they
were designed
Measured
“Can
Measured on today’s results
“Can get things done …”
M
THE POWER OF 9 …

26. 61% ↓ in under performance
↑65% ↑ in exceptional performance
Leadership began to behave like a team
Challenge: Some of the managers weren’t
believers and some weren’t performers so
the initial efforts were ‘sub-optimal’
AND THE RESULTS OVER 12 MONTHS …

27. YOU’VE CREATED BELIEVERS … WHAT NEXT?

28. THE SECOND GENE THERAPY…

29. SOMETIMES SUBTRACTION IS EASIER …

30. Meetings
NOT 0!NOT 0!
ProcessDocumentation ProcessDocumentation
INSTITUTIONAL TIME SINKS …

31. “Or this?”“Is this your calendar?”
If you spend your
d i idays in meetings
you are not getting
thi danything done.
PROTECT YOUR CALENDAR …

32. Later that year…
“What to do?”
Later that week …
Later that month …
CONSENSUS MEETINGS … JUST DON’T GO

33. #1 Know WHY you are there
#2 Add VALUE or LEAVE
#3 DECIDE ASSIGN#3 DECIDE or ASSIGN
HALF any standing meeting
Own your calendarOwn your calendar
JUST STOP …

34. You have a 100 pageou a e a 00 page
strategy and 200
page business planp g p
… is it helping?
DOCUMENTATION TAKES TIME …

35. Parses work
Makes visual
Tells a story
Only the essential info
M tl b ll tMostly bullets
Fluidic in nature
Doubles as a reporting toolDoubles as a reporting tool
WHAT’S A ONE PAGER?

36. OPERATIONSAssumes: Stability
Business cornerstone:
The 3 year strategy
The annual plan
Annual objectives
Time
OPERATIONS
One
Page
r
Assumes: Moving Target
One
Page
r
Update EventCollection of
1 pgs creates Plan
THE CHALLENGES WITH CURRENT PLANNING

37. Responded to a
competitive threat in
3 weeks from
identification rather
than 12-14 months
Cut the business
planning cycle by
50% with significant
more teammore team
participation/buy in
ARE ONE PAGERS VALUABLE?

38. … and end up here.
We start off here …
WE LOVE OUR PROCESSES …

39. … results in an SOP.
The complexity of this
process ….process ….
SOPS EVOLVE TO TELL PEOPLE WHAT TO DO

40. … and they stop thinking.
We train people to follow
the SOP …the SOP …
WE TRAIN PEOPLE TO FOLLOW PROCEDURE

41. … they stop.
When a situation is not
covered by the SOP …covered by the SOP …
THE PROCEDURE REPLACES THINKING

42. R d SOP t thReduce SOPs to the
essential few; then cutessential few; then cut
that in half.

43. Value Stream Maps and kaizens
THEN SIMPLIFY WHAT’S LEFT

44. DEVELOPMENT CELLS

45. MatrixHierarchy
Coordination & communication
Flexibility
Complexity: accountability
Authority & control over resources
Functional specialization
Distance: decision ↔ execution
RACI MODEL
Over specifying decisions
Adding ‘everyone’ to the model
RACI MODELKeep everyone ‘engaged’
HIERARCHY TO MATRIX …

46. Evolved Matrix Organization:Portfolio Lifecycle
Development Cells
Evolved Matrix Organization:
Portfolio of work vs a project
Smaller core team; self selecting
Ability to move resources
Small Core
Teams (cell)
Small Core
Teams (cell)
Portfolio Lifecycle
Management Function
y
Ability to deviate from process/rules
Ability to make strategic investments
Internal & External
Support Teams
Role vs structure driven
SUPPORT team
Investments:
Longer term commitments
Return:
Start-up responsivenessLonger term commitments
Access to core team members
Plan/process deviations
Responsive to escalations
Start-up responsiveness
Ultrahigh output
Team ownership
sp s s s
Accept higher failure rates
EVOLVING TO DEVELOPMENT CELLS