Chapter 12 Innovate

Chapter 12 Innovate

1. companies become larger

   • they lose the capacity for innovation
     • vs
   • Portfolio thinking.

2. Disruptive Innovation

   • structural attributes
     • scarce but secure resources
       • Startup budget
         • Too much budget is as harmful as too little
           • dotcom
         • sensitive to budget changes
         • capital must be secure from tampering.
     • independent authority to develop their business,
       • high level autonomy
       • involve all functional departments
       • avoid handofd and approvals
         • they slow down the learn feedback
       • rapid iteration
     • personal stake in the outcome
       • need a personal stake
       • bonus system
         • Entrepreneur
           • make it clear who is
           • make sure he receives the credit
       • shusa
         • heavy-weight project managers
         • absolute authority over every aspect of their project

3. Problems in platform for experimentation

   • Protecting the Parent Organization
     • focuses on protecting the startup from the parent organization
     • use actionable metrics
   • Rational Fears
     • Out of fear of endangering the current business
       • each proposed experiment would be delayed, sabotaged, and obfuscated.
   • Hiding Innovation inside the Black Box
     • Hiding from the parent organization the innovation
       • IBM
         • can't replicate its model
     • negative consequences
       • people feel betrayed
       • loses confidence

4. Innovation Sandbox

   • contain the impact of the new innovation
     • characteristics
       • 1. Any team can create a true split-test experiment
       • 2. Must see the whole experiment through from start to end
       • 3. Run in a specified amount of time (weeks)
       • 4. Can affect a specified number of customers
       • 5 Has to be evaluated on the basis of a single actionable metrics.
       • 6. Every team and product must use the same metrics to evaluate success.
       • 7. Monitor the metrics and customer reactions
     • Beginning
       • the sandbox has to be quite small.
     • the sandbox will grow over time
       • there may be opportunities to enlarge the scope of the sandbox
     • Holding Internal Teams Accountable
   • is like developing startup muscles
     • promotes rapid iteration

5. Cultivating the Management Portfolio

   • Status Quo
     • From radical outsiders to the embodiment of the status quo.
       • achieve mastery
         • is to embed oneself in a community of practice
     • New ideas, use Lean Startup
       • every suggestion should be subjected to a rigorous scientific inquiry
   • Entrepreneur
     • could be considered a career path for innovators inside large organizations
     • After incubated a product
       • it has to be reintegrated into the parent organization.
         • gives the innovators a chance to train new team members

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