Established businesses often have trouble running fast on new innovation initiatives. How can they overcome the innovator's dilemma? This talk looks at how intrapreneurs working on cutting edge programs might anticipate and overcome challenges to bring their idea, with all its risks and unknowns, to fruition in an organization that is optimized for operational excellence on existing programs.

1. © 2015 ConceptSpring
Elaine Chen
2015
Corporate
Entrepreneurship

2. The old way

3. The new way

4. Test and experiment:
Validate hypotheses at every step
Minimum
Viable
Product

5. Common challenges and solutions
• Need “Air Cover”
• Brand reputation risk
• Sales cannibalization risk
• No budget
• Competing priorities
• Legacy employee behaviors
• Silo thinking
• Slow, regimented processes
• Counterproductive incentive systems
• Marginalized projects
• Orphaned projects
• Get buy-in from a high-ranking executive
• Test in small/limited ways under a fake brand
• Test in small numbers within test markets
• Secure budget (existing or new)
• Dedicated space and team
• Select team members by eship aptitude/interest
• Actively promote cross functional collaboration
• Invent new, autonomous management processes
• Invent new reward systems
• Choose projects relevant/important to parent biz
• Follow through with tech transfer
Challenges Solutions

6. Case Study: Internal service to optimize
logistics for iron-ore mining

7. Top 3 challenges
• Need “Air Cover”
• Brand reputation risk
• Sales cannibalization risk
• No budget
• Competing priorities
• Legacy employee behaviors
• Silo thinking
• Slow, regimented processes
• Counterproductive incentive systems
• Marginalized projects
• Orphaned projects
• Division VP became a champion – opened doors
• Test in small/limited ways under a fake brand
• Test in small numbers within test markets
• Make do this year; propose new budget next year
• Dedicated space and team
• Select team members by eship aptitude/interest
• Actively promote cross functional collaboration
• Invent new, autonomous management processes
• New project included in performance review
• Choose projects relevant/important to parent biz
• Follow through with tech transfer
Challenges Ideas

8. Result
• VP helped them get access to port operators for
primary market researches
• 5-10 interviews completed
• Defined problem and proposed MVP
• Secured funding for next budget cycle
• Developed program plan / recruited team members for
2 phases: before budget / after budget
• Project is still ongoing

9. Case Study: SaaS pricing for MCAD
• Testing an existing enterprise mechanical CAD
software product against a low-end market using a
SaaS based pricing structure
Pricing model: One time fee of
$3,995 per named user license +
$1,200 / year annual subscription
fee
Target Market: Large Enterprises
($500M+ annual revenue)
Enterprise pricing model SaaS pricing model
Pricing model: $100 / month per
named user, no contract
Target Market: Startups and SMEs
(Pre-revenue to <$5M revenue)

10. Top 3 challenges
• Need “Air Cover”
• Brand reputation risk
• Sales cannibalization risk
• No budget
• Competing priorities
• Legacy employee behaviors
• Silo thinking
• Slow, regimented processes
• Counterproductive incentive systems
• Marginalized projects
• Orphaned projects
• Biz Unit General Manager became the champion
• Secretly do A/B test – stop test after 100 hits
• Test in small numbers within test markets
• Postpone investment projects and do this instead
• Dedicated space and team
• Select team members by eship aptitude/interest
• Actively promote cross functional collaboration
• Invent new, autonomous management processes
• New project included in performance review
• Choose projects relevant/important to parent biz
• Follow through with tech transfer
Challenges Ideas

11. Result
• 100 sample points collected on A/B testing
• Results uninspiring – original assumptions of target
market, value proposition etc. in question
• Team decided not to proceed with project based on
these results – saved $$$ and opportunity cost

12. Case Study: GE Monogram Refrigerator

13. Before
• Product revision every 5 years
• Keep product under wraps until release
• Big planning team
• Big development team
• Big budget
• Heads-down during development/production
• First market feedback available after launch

14. “You’re going to change every part the customer
sees. You won’t have a lot of money. There will be a
very small team. There will be a working product in
3 months. And you will have a production product
in 11 or 12 months.”
- Chip Blankenship, CEO of GE Appliances – January
2013

15. Top 3 challenges
• Need “Air Cover”
• Brand reputation risk
• Sales cannibalization risk
• No budget
• Competing priorities
• Legacy employee behaviors
• Silo thinking
• Slow, regimented processes
• Counterproductive incentive systems
• Marginalized projects
• Orphaned projects
• Biz Unit CEO became the champion
• Secretly do A/B test – stop test after 100 hits
• Test in small numbers within test markets
• Postpone investment projects and do this instead
• Dedicated space and team
• Clear expectations lead to different behaviors
• Actively promote cross functional collaboration
• New processes across the board
• New project included in performance review
• Choose projects relevant/important to parent biz
• Follow through with tech transfer
Challenges Ideas

16. After
• Working “product” in 3 months
• 5 prototypes tested in 2013
• 3 more prototypes in 2014
• V8 went to production in Oct 2014
• Annual releases thereafter
=> 22 months elapsed time from V1 prototype

17. Result
“Half the program cost, twice the
program speed, and currently
selling over two times the normal
sales rate.”
– “How GE Applies Lean Startup
Practices”, Harvard Business
Review, April 2014.

18. Not only was it faster, it made a better
product
• 1/2: The length of the assembly line was reduced by 50 percent.
• 20: Lean eliminated 20 parts from just one assembly area, the vegetable pan.
GE estimates they’ve eliminated more than 100 parts in the average
refrigerator compared to previous models.
• The new bottom-freezer refrigerator line achieved the ENERGY STAR® rating
that is 20 percent better than current guidelines for refrigerators, meeting
2014 requirements.
• 25%: Using Lean’s cross-functional team approach, the team brought the
product to the shelf in 25 percent less time, since steps could be done
concurrently rather than consecutively.
• 1 out of 2: Even though the new refrigerators will have more features than the
previous model, the Lean team removed 50 percent of the wiring.
- “The Skinny on Lean: Use It or Lose It – GE Appliances and the Lean Process” –
GE Appliances Press Room

19. “The Diesel Engine MVP”
19
https://www.youtube.com/watch?v=rkdsYTlEGfQ

20. Other examples
20

21. One last case study: Parker Hannifin

22. Craig Maxwell
Corporate VP of Technology and Innovation, Parker Hannifin; creator of
the Parker Hannifin Tech Incubator

23. Ryan Farris, Ph.D.
Beyond traditional motion control:
Investing in an exoskeleton for paraplegics from Vanderbilt

24. Prototypes relaxing in the Parker
Hannifin Incubator

25. Indego exoskeleton in action

26. It has been done. It can be done.
• Need “Air Cover”
• Brand reputation risk
• Sales cannibalization risk
• No budget
• Competing priorities
• Legacy employee behaviors
• Silo thinking
• Slow, regimented processes
• Counterproductive incentive systems
• Marginalized projects
• Orphaned projects
• Get buy-in from a high-ranking executive
• Test in small/limited ways under a fake brand
• Test in small numbers within test markets
• Secure budget (existing or new)
• Dedicated space and team
• Select team members by eship aptitude/interest
• Actively promote cross functional collaboration
• Invent new, autonomous management processes
• Invent new reward systems
• Choose projects relevant/important to parent biz
• Follow through with tech transfer
Challenges Solutions

27. You can be the Craig Maxwell for
your organization

28. @chenelaine blog.conceptspring.com
Thank you