Chief Strategy Officer Summit - NYC - 12 Dec 2012 We have all heard how this year will be the year of mobile/ecommerce/digital/social/etc. We constantly hear about how some technology will dramatically disrupt our business. The reality is that many innovations are surrounded by hype. As strategists, our role is to sort through the noise to uncover nuggets of insight that lead to cogent strategies and measurable results. How do we identify hype? How do we evaluate tech maturity? How do we rationalize investments into unknown technologies? This presentation will share some informative cases and present a pithy approach for assessing, selecting, and exploiting innovation.

1. Chief Strategy
Officer Summit
New York
Hype or Hope?
HOW TO SEPARATE HYPE FROM REAL INNOVATION
ILIYA RYBCHIN
Bloomberg LP
6 December 2012
@rybchin

2. INTRODUCTION
Have you heard this phrase recently?
2013 is the year of mobile!
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3. INTRODUCTION
Perhaps you heard this phrase
2013 is the year of …
Convergence
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4. INTRODUCTION
Before moving forward let’s define innovation and dispel myths
DICTIONARY DEFINITION:
in-no-va-tion (noun)
1. The introduction of
something new
2. A new idea, method, or
device
MY DEFINITION:
1. Change that has meaningful
business consequences;
new business, service, or
product concepts that have
positive financial impact
Common Myths:
§ New Technology = Innovation
§ Innovation comes from luck
and circumstances and not
from a repeatable process
§ There are definitive answers to
whether something is really
innovative
2. New ideas that
fundamentally change the
basis of competition within
the industry
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5. INTRODUCTION
Opposing views can be equally valid and correct
Social Media is…
… the intersection of
excess spare time and
excess narcissism.
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… a powerful and costeffective new way for
companies to engage
with customers.
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6. 1
Manage up
2
Stay ahead of the hype
3
Have an opinion
4
Change your opinion
5
INTRODUCTION
To help navigate the ocean of hype, I have 5 pithy rules
Act instead of admire
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7. 1
Manage up
2
Stay ahead of the hype
3
Have an opinion
4
Change your opinion
5
Act instead of admire
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8. MANAGE
Hype is a virulent disease that needs to be actively managed
§ Managing up will help “inoculate” your organization from hype
§ Senior management may form opinions with limited information, limited
context, and rely on questionable advisors
UP
§ Media, pundits, consultants, academics, and other assorted “experts” should
not be allowed to set the innovation agenda for your company
Why is this important?
§ CEOs should not learn about innovation from strangers
§ Too much wasted time, energy, & effort – without tangible
progress
§ Distraction from competing alternative that actually do
move the business forward
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9. Examples (illustrative)
1. Establish credibility
(not expertise)
§ Vendor/VC Summits
Regular events where Vendors &
VCs assemble to present roadmaps,
products & ideas
2. Manage the information flow
§ “Frightening Fridays”
Standing lunch meeting where a
potentially disruptive startup is
invited to present to the company
3. Communicate
4. Communicate more
5. Communicate much more
UP
What should you do?
§ Newsletters
Regular newsletter highlighting
innovation, R&D, VC activity, and
opportunities for the company
§ Think Tanks
Focused brainstorming workshops
with internal (and possibly external)
subject matter experts
§ Expert Panels
Standing meetings with key the
company stakeholders to review
pipeline & sourcing activities
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MANAGE
Create a managed fire hose of information
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10. 1
Manage up
2
Stay ahead of the hype
3
Have an opinion
4
Change your opinion
5
Act instead of admire
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11. STAY
Time to discuss innovation is different from time to act
Gartner Hype Cycle
Negative media begins
Act
Initial in-market products
Initial media coverage
Early stage startups
Prototypes
R&D
Discuss
OF
Expectations
AHEAD
Positive media hype peak
THE
HYPE
Time
Why is this important?
§ The earlier you identify potential innovations, the more time
you have to assess, discuss, debate, prototype, market test,
and discuss…
on your terms and your timeline
§ Potential for disruptive impact and defensible advantage
erode quickly as you progress down the Hype Cycle
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12. Examples (illustrative)
1. Allocate time/staff
Innovation Radar
-dedicated staff
-volunteers
AHEAD
What should you do?
STAY
Develop an “Innovation Scouting & Analysis” capability
2. Generate innovation hypothesis
OF
THE
3. Build a network and establish
critical external relationships
HYPE
§ Centralized web-based hub for innovation
scouting & analysis
§ Plotted Maturity vs. Strategic Importance with
visualization for revenue potential, momentum,
and ability to leverage
§ Organized, companies, relevant projects, news,
key employees, and supporting docs
§ 3 person team (2 scouts, 1 editor)
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13. STAY
Innovation Radar: A closer look
AHEAD
OF
THE
HYPE
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14. 1
Manage up
2
Stay ahead of the hype
3
Have an opinion
4
Change your opinion
5
Act instead of admire
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15. HAVE
Even a wrong opinion is better than no opinion
§ The mere act of forming an opinion asks key questions, challenges
assumptions, and pushes leaders to think strategically
OPINION
§ The absence of an opinion creates a void that allows the hype virus to
incubate
§ If you reach a decision early enough on the hype curve, you will have plenty
of time to re-evaluate, refine, and adjust your decision
§ As you progress further down the hype curve, urgency & risk increase
dramatically
§ Sometimes telegraphing a decision to your competitors can be beneficial
§ Establishing a position early allows you to shape the direction
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AN
§ An opinion (based on facts) forms the starting point for a structured discussion
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16. 1. Learn enough about the
innovation to answer critical
questions
(no need to be an expert)
Strategic
fit
2. Make assumptions that will fill
in knowledge gaps
How well does the concept fit
with current company strategic
themes and business imperatives?
How well does the concept align
Customer with needs/wants of customers
fit
and their willingness to pay?
Brand
fit
3. Explore the contrarian view to
stress test the assumptions
4. Reach a conclusion and
disseminate it broadly in the
organization
Is the concept brand
appropriate”, easy to
communicate, and newsworthy?
Real
factor
How real is the concept, i.e., what
evidence do we have of
demonstrated market success?
Impact
How significant is the concept s
impact on financial and other key
business metrics
Does the concept fit within
Feasibility existing technical, geographic, or
operational constraints?
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OPINION
Examples (illustrative)
AN
What should you do?
HAVE
A simple evaluation framework enables rapid opinion making

17. 1
Manage up
2
Stay ahead of the hype
3
Have an opinion
4
Change your opinion
5
Act instead of admire
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18. Prepare to be flexible, open
minded, and humble
CHANGE
Innovation is an ego-less
endeavor
YOUR
No opinion survives first contact with…
§ …colleagues
§ …executives
§ …customers
§ …partners
§ …consultants
§ ….time
OPINION
Why is this important?
§ Just because it’s a good business doesn’t mean it’s any of
your business
§ The market evolves faster than your ability to adequately
analyze it
§ The probability of being wrong increases exponentially as
you compound assumptions
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19. WebOS
OPINION
3
iOS
Growth
potential of
user base
Interest level
among
advertisers
Android
Size of
existing
user base
2
RIM
YOUR
1
Windows
CHANGE
Example: Selecting operating systems on which to develop
Low
High
Re-Evaluation
Point
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20. 1
Manage up
2
Stay ahead of the hype
3
Have an opinion
4
Change your opinion
5
Act instead of admire
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21. ACT
Hype well executed is better than hope poorly managed
§ Brilliant PowerPoints alone do not advance the business
INSTEAD
§ Common reasons for innovation failure:
§ Launching too early
§ Giving up too soon
§ Launching too late
Insufficient analysis will not be
the reason the innovation fails
OF
§ Hanging on too long
ADMIRE
Why is this important?
§ Nothing creates analysis paralysis like the hype virus
§ Well executed “experiments” are cheaper than the
opportunity costs of sitting still
§ The disruptive startup that may threaten your business does
not need months of analysis and dozens of meeting to invest
$50,000 in a new product
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22. lifestyle
publications
retail
visits
call center
visits
market
research
market
conferences
trends
concepts
customer business
desirability viability
strategic
plan
competitors
technical
feasibility
business
publications
customer
desirability
prototypes
business
viability
technical
feasibility
operational
requirements
features
lists
products &
services
customer business
desirability viability
technical
feasibility
technical
requirements
ADMIRE
inspiration
workshops
internal
groups
initiatives
business
model
OF
living
lab
concept
brief
user
scenarios
academic
research
technology
trends
corporate
research
Generate
hypothesis
Source
innovations
What do we believe
about our markets
and customers?
| ILIYA RYBCHIN
Qualify
innovations
Which
opportunities
are most
attractive?
Build business
case
What contribution
does it make to
our business?
Develop go-to
market plan
How do we get
the initiative to
market?
INSTEAD
social
trends
ACT
A repeatable process is the only true test for innovation
Launch/manage
products & services
Is the initiative meeting or
exceeding expectations?
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23. 1
CONCLUSION
Conclusion
Manage up
These rules are just a starting
2
Stay ahead of the hype
point… ultimately every
organization must discover their
3
Have an opinion
4
Change your opinion
5
Act instead of admire
| ILIYA RYBCHIN
own approach to proactively
uncovering, evaluating,
discussing, and acting on
potential innovations
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24. I L I Y A
THANK YOU
Thank you
R Y B C H I N
i r y b c h i n @ b l o o m b e r g . n e t
@ r y b c h i n
| ILIYA RYBCHIN
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