Helpful Notes
There’s so much to learn about innovation and transformation, we couldn’t fit it all into the book!
We’re happy to share the following Helpful Notes to inspire you to continue your innovation journey.
101
According to Sarvari, Ustundag, Cevikcan, Kaya, Cebi the market is already now confused on what to use, how to use it and how it all fits together (Ustundag and Cevikcan, 2018). Prisecaru even argues that the many different Digital Transformation frameworks, methods and approaches lead to more confusion and misunderstanding than they support transformation (Prisecaru, 2016).
102
See Drucker 1954, page 144.
201
In 2000, General Electric was valued at $480 billion. As per February 2021, GE was worth $96 billion. A short background article can be found here: https://bit.ly/36O8HXo .
202
The traditional industrial sector is defined as the value added in mining, manufacturing, construction, electricity, water, and gas; more background on its evolution can be found here: https://bit.ly/3aiGhH4 .
203
See Schumpeter and Swedberg 1994.
204
To learn more about Moore’s law, read the dedicated Wikipedia page here: https://bit. ly/38AG3L4.
205
This massive growth in computing power is made possible through the greater and greater reduction of the size of transistors, which has allowed adding more transistors per CPU. The first transistors in 1907 were about 10cm tall; today, they have been reduced to about 12 nanometers (1 nanometer is approximately 10 times bigger than the size of an atom). Since transistor sizes are reaching the limit of what is physically possible, Intel introduced in 2005 the first multi-core CPUs doubling the number of processing units on a single CPU. Graphic Processing Units (GPUs) are currently the main reason for the continuation of Moore’s law, allowing massive parallel processing of specific problems on thousands of cores (Current Nvidia GPUs have up to 6,000 cores).
206
In 2001, Ray Kurzweil published one of the most significant essays in the history of futurism: “The Law of Accelerating Returns.” This piece showcased the immense power of exponential technology versus linear technology, and his law became a pivotal concept for anyone trying to anticipate the future. The full article is available on Kurzweil’s website: https://bit.ly/3nkcbHb .
207
To better understand exponential growth and the resulting opportunities, consider watching this engaging YouTube video by Salim Ismail, the author of Exponential Organizations : https://bit.ly/3pCEdhA .
208
See previous note.
209
As an example, we could compare the computing performance of the iPhone 1 (called iPhone Edge), released in 2007, with the iPhone 11, released in 2019 (twelve years later). The CPU (the Central Processing Unit) has multiplied its power by 164.2, while the GPU (Graphic Processing Unit) did it 1883.7 times. Read more here: https://bit.ly/3ranW6p .
210
Graham Kendall, a professor of computer science at the University of Nottingham, presents an entertaining in-depth analysis of the computing power of modern phones and calculators versus the Apollo 11: https://bit.ly/3iSmkLp .
211
In The Day After Tomorrow , Peter Hinssen writes about an exponentially changing world and its consequences for the organizations of today. More information is available here: https:// bit.ly/3vQELEL .
212
Learn more on Wikipedia about Global Internet Usage: http://bit.ly/3cQbRxI .
213
For a more complete picture of how the world around us has developed over the past 20 years, consider reading the book Abundance (Diamandis and Kotler 2014) or Factfulness (Rosling, Rosling and Rönnlund 2018). Both are fascinating, data-driven books about how human civilization has progressed and failed to progress. Alternatively, consider the book The Shenzhen Experiment: The Story of China’s Instant City (Du, 2020). The book tells the fascinating story and current status of Shenzhen –ground zero for the economic transformation China has seen in recent decades. In 1979, driven by China’s widespread poverty, Deng Xiaoping supported a bold proposal to experiment with economic policies in a rural borderland next to Hong Kong. The site was designated as the City of Shenzhen and soon after became China’s first Special Economic Zone (SEZ). Four decades later, Shenzhen is a megacity of twenty million, an internationally recognized digital technology hub, and the world’s most successful economic zone. 213 - See Schumpeter and Swedberg 1994.
214
“You can have any colour, as long as it's black” is a great article by Tony Seif about the Ford Model T: http://bit.ly/36S6N8d .
215
4-dimensional printing (4D printing; also known as 4D bioprinting, active origami, or shape- morphing systems) uses the same techniques of 3D printing through computer-programmed deposition of material in successive layers to create a three-dimensional object. However, in 4D printing, the resulting 3D shape is able to morph into different forms in response to environmental stimulus, with the 4th dimension being the time-dependent shape change after the printing. It is therefore a type of programmable matter, wherein after the fabrication process, the printed product reacts with parameters within the environment (humidity, temperature, voltage, etc.) and changes its form accordingly. Read more here: https://bit. ly/3Glfxn7 .
216
Read more in this Forbes article, “The Evolution of Strategy“: http://bit.ly/3ryM4Ov .
217
Find more information about our VUCA world here: https://bit.ly/33cOFr5 .
218
Stephan Grabmeier summarizes the shift from a VUCA to a BANI world best in the following article: https://bit.ly/3fQ6q2Z . The original concept of a BANI world came from Jamais Cascio and was first published on Medium in 2020: https://bit.ly/3ckFer0 .
219
As an example for a really broad vision on digitalization, consider the bold move behind “Japan's Society 5.0” plans. The country has bold plans to go beyond what is in Germany called “Industry 4.0,” and has created an encompassing vision of how to transform on five different levels. See here for more details: http://bit.ly/2zAAoUr .
220
The 3 Horizons model was originally developed by McKinsey and featured in the book The Alchemy of Growth (Baghai, Coley and White 2000). The original version of the model, however, no longer applies since the term “horizons” in their conceptualization referred to timespan. In short, it was assumed that innovations would take a much longer time than changes in the other two horizons and thus needed to be thought about in terms of long-term planning. These assumptions are no longer true. Read more about why McKinsey’s original model no longer applies in this article by Steve Blank in the Harvard Business Review : https:// bit.ly/35lp0dh .
221
McKinsey is one of the institutions that has repeatedly surveyed the success of digital transformation and innovation . They write, "Years of research on transformations has shown that the success rate for these efforts is consistently low: less than 30 percent succeed; in our 2016 survey, the rate of success was 20 percent; in 2014, 26 percent; and in 2012, 20 percent." https://mck.co/3fxtUqG .
222
Find more information on the original concept of ambidextrous organizations here http:// bit.ly/2oE5eU5 (Blank 2015) and here http://bit.ly/2pqk1oj (O’Reilly III and Tushman 2017).
223
Find more information about our VUCA world (Volatility, Uncertainty, Complexity and Ambiguity) here: https://bit.ly/33cOFr5 . Stephan Grabmeier summarizes the shift from a VUCA to a BANI world (Brittle, Anxious, Nonlinear, Incomprehensible) best in the following article: https://bit.ly/3fQ6q2Z . The original concept of a BANI world came from Jamais Cascio and was first published on Medium in 2020: https://bit.ly/3ckFer0 .
224
The notion of the “ambidextrous organization” from O’Reilly and Tushman, posits that companies that want to do continuous innovation need to execute their core business model while innovating in parallel. In other words, in an ambidextrous company you need to be able to “chew gum and walk at the same time.” Find more information on the original concept of ambidextrous organizations here http://bit.ly/2oE5eU5 (Blank 2015) and here http://bit. ly/2pqk1oj (O’Reilly III and Tushman 2017).
225
The Forbes article written at the time when this division was happening provides useful insights https://bit.ly/3daRKqC , as does this more recent article from Investopedia https:// bit.ly/3gp6GWR . The 2021 rebranding from Facebook to Meta likely follows btw at least partially similar thinking.
301
Capability Management seeks to manage the capabilities within the firm so as to ensure its ongoing survival, profitability, and position in the industry. Through Capability Management, the competitive position of firms can thus be analyzed as well as increased. Capability Management replaces the earlier dominant theory of the Resource-Based View of the firm (RBV) based on Ricardian economics (David Ricardo wrote his foundational text, Principles of Political Economy and Taxation , in 1817). The fundamental argument of the Resource- Based View is that firms derive their profitability from the control of resources—and thus are in competition to control those resources. In light of increasing digitalization and service- based industries, thinking about competitive positioning based on capabilities is more useful. For more details, consider reading (Teece 2017): https://bit.ly/3oFE8tL .
302
A 2019 survey of more than 400 global CEOs revealed that the ability to execute strategy was their number one challenge—ahead of innovation, geopolitical instability, and top-line growth. Executives are right to be concerned. At least 2/3rds of large organizations struggle to implement their strategies. The following HBR article details the reasons why: https://bit. ly/2AH28sM .
303
Consider any non-dedicated team as a warning sign; such setups typical have a high risk of failure. Without a serious commitment, people can only invest themselves to a limited degree. As a consequence, the innovation takes too much time to get to the market. If you are lacking support now, can you truly expect more support later when you will need (many) more resources?
304
A Stage-Gate System is a conceptual and operational road map for moving a new-product project from idea to launch. Stage-Gate divides the effort into distinct stages separated by management decision gates (gatekeeping). Cross-functional teams must successfully complete a prescribed set of related cross-functional activities in each stage prior to obtaining management approval to proceed to the next stage of product development. Stage-Gate is based on the premise that some projects and project teams really understand how to win - they get it! Indeed Stage-Gate was originally developed from research that modeled what these winners do (Cooper, 2004). But too many projects and teams miss the mark - they simply fail to perform. A closer inspection often reveals that these projects are plagued by missing steps and activities, poor organizational design and leadership, inadequate quality of execution, unreliable data, and missed timelines. So they need help - help in the form of a playbook based on what winning teams do. Stage-Gate is simply that playbook. Find more details here: https://bit.ly/3Gp7buv .
305
Pivot/pivoting: start-up slang to describe a (more or less systematic) approach to testing different business ideas. Once a business idea has turned out not to work (for whatever reason), a start-up (defined as an entity that has to yet solidify its Business Model) will “pivot” to an adjacent Business Model, typically by changing one of the key components of the Business Model (i.e., changing the target audience). In its ongoing search for a Business Model, a start-up will undertake frequent pivots towards ideally superior Business Models. For these reasons, pivots need to happen quickly, rapidly and often. More on pivoting here: https://bit.ly/2Svpefa (Blank 2010)
306
This maxim is adapted from the quote, “No plan of operations reaches with any certainty beyond the first encounter with the enemy's main force,” from Field Marshall Helmuth Graf von Moltke. Strategy is a field that originally came from the military, which is why a lot of the vocabulary used in strategy is military in nature. More information on Helmuth Graf von Moltke is available here: http://bit.ly/2poKBhr . Moltke was the student of Carl von Clausewitz, one of the key figures in the invention of modern (military) strategy. Other key books on the origins of (military) strategy include, The Art of War by Sun Tzu (originally published in the 5th century BC), The Prince by Nicolo Machiavelli (originally published in 1532), and On War by Carl von Clausewitz (originally published in 1832). 3
307
A Persona is a typical representative of a larger Customer Segment. A description of a Persona should include visual material (photo of a typical segment representative and potentially photos of the typical “world” of this Persona), demographic, sociographic and psychographic data. Importantly, Personas should represent reality and not just be invented and designed to your taste (a common problem, believe it or not!). Demographic data is typically least useful, since it will not help you understand how a person behaves. In creating a Persona, it is critical to discuss what the “design-relevant parameters” are. This will help you determine what information is relevant to your product. A useful introduction on Personas can be found here: http://bit.ly/2ooUhs2 . See also the following critical discussion of Personas and the related Jobs to be Done concept: http://bit.ly/2nN6SUs .
308
To deep-dive on “finding the right job for your product,” read this amazing article by Clayton M. Christensen (one of the fathers of JTBD) and colleagues: https://bit.ly/3cFBa4Q .
309
Jobs to be Done /Who/Do / Job Stories: The best way to get started is to watch the wonderful video of Clayton Christensen explaining the concept with real-life examples: https://bit. ly/33Km24x . To deepen your understanding, consider some of the following articles: http:// bit.ly/2nN9xNS ; http://bit.ly/2nsGT1s (Klement 2013). If you want to really go deep, consider downloading the following book (free of charge!): Intercom on Jobs-to-be-Done . Available at: https://www.intercom.com/books/jobs-to-be-done (Traynor et al., 2016), or review the possibly best book on the topic of Jobs to be Done currently on the market, Jim Kalbach’s The Jobs To Be Done Playbook (2020).
310
The original idea of segmenting wine by Jobs to be Done is from Laurence Veale, who has documented this idea in the following article: https://bit.ly/3cH56xt .
311
There is a wide variety of research, and thus different statistics available globally, concerning the failure rate of both corporate innovation and start-ups. Most publications seem to agree that the failure rate of innovation is around 90%, with the lowest figure quoted we came across being a failure rate of 75% and the highest being a failure rate of 96% within the first four years alone. You can see one such study here: https://bit.ly/37M0hQ8 . 31
312
“More specifically, explains Hastings, there are only a certain amount of hours which humans can tend to activities, and Netflix’s goal is to occupy those moments—and deliver the utmost joy to the consumer during that opportunity. ‘You get a show or a movie you’re really dying to watch, and you end up staying up late at night, so we actually compete with sleep,’ he said of his No. 1 competitor .“ Read more here: https://bit.ly/3jlTRhd . You can also watch this highly entertaining vide where he argues (amongst many other points) that the main competitor of Netflix is a bottle of wine: https://bit.ly/3nmaw5z . Although we don’t see why you could do both.
314
Please watch this wonderful video of Clayton Christensen explaining the concept of JTBD with real life examples: https://bit.ly/33Km24x .
315
A short explanation of the sunk cost fallacy: "In economics, a sunk cost is any past cost that has already been paid and cannot be recovered. For example [...] let’s say you buy tickets to a concert. On the day of the event, you catch a cold. Even though you are sick, you decide to go to the concert because otherwise ‘you would have wasted your money.’ Boom! You just fell for the sunk cost fallacy. Sure, you spent the money already. But you can’t get it back. If you aren’t going to have a good time at the concert, you only make your life worse by going." Businesses fall for this all the time, by throwing good money after bad, as they say. Read more here: http:// bit.ly/2BwXpoq .
316
The underlying approach here, called customer development, has been well-documented by Steve Blank (2017). Blank also has a highly interesting blog on entrepreneurship, customer development and innovation at www.steveblank.com .
317
The case study entitled, “Learning from corporate mistakes: The rise and fall of Iridium,” provides an interesting exploration of this: https://bit.ly/3zu7BwO .
318
Studies over the last 25 years have proven conclusively that it pays to do things right the first time. Late-stage changes are expensive. Researchers at Hewlett-Packard, IBM, Hughes Aircraft, TRW, and other organizations have found that purging an error by the beginning of construction allows rework to be done 10 to 100 times less expensively than when it's done in the last part of the process, during system test or after release. For more background, see Fagan 1976; Humphrey, Snyder, and Willis 1991; Leffingwell 1997; Willis et al. 1998; Grady 1999; Shull et al. 2002; Boehm and Turner 2004; Moreira 2017.
319
For a more detailed discussion of how agile methodologies contribute to decreasing the costs of change, see Bird 2013: https://bit.ly/3f3kyUl .
320
There is a wide variety of research and thus different statistics available globally concerning the failure rate of both corporate innovation and start-ups. Most publications seem to agree that the failure rate of innovation is around 90% with the lowest figure quoted we came across being a failure rate of 75% and the highest being a failure rate of 96% within the first four years alone . One exemplary source is is: https://bit.ly/37M0hQ8 .
321
Ibid .
322
Since 2014, CB Insights has continuously analyzed the reasons that start-ups fail; and their conclusions are profound. By July 2021, CB Insights had analyzed an impressive 368 start- up failures. Take a look at the causes of failure here: https://bit.ly/3a2YsRw . Get the full compilation of start-up failure post-mortems by founders and investors here: https://bit. ly/3lEDv2f
323
This is one of the key principles of the Lean Startup movement, a methodology for developing businesses and products that aims to shorten product development cycles and rapidly discover if a proposed Business Model is viable. This is achieved by adopting a combination of business- hypothesis-driven experimentation, iterative product releases, and validated learning. Learn more about the Lean Startup from Wikipedia: https://bit.ly/2W5Qm2g or directly from its founder Erik Ries: https://bit.ly/3qLHIUP .
324
-For a fuller definition of MVP, see https://bit.ly/3nl6Yiz and https://bit.ly/3qTund0 .
325
A unicorn is a privately held start-up company valued at over $1 billion. The term was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures. In the meantime, so many unicorns exist, that the term inflated, and terms for valuations of $10 billion (decacorns) and $100 billion valuations (hectacorn) had to be invented. More details on Wikipedia: https://bit.ly/31c13V1 ; an up-to- date list of unicorns is available from CB Insights: https://bit.ly/35xLkjM .
401
According to Ustundag and Cevikcan (2019) the market is confused about what to use, how to use it and how it all fits together. Prisecaru even argues that the many different digital transformation frameworks, methods, and approaches lead to more confusion and misunderstanding than successful transformation (Prisecaru 2016).
402
- Innovation badly needs increased investment security. The most optimistic statistics give corporate as well as private start-up innovations a failure rate of 70%, with the most negative statistics suggesting a 96% failure rate within the first four years. Of those remaining, only a fraction are successful—most innovations remain small and are irrelevant to the overall market. The biggest reason for these shocking numbers is that people are not taking the time to understand their customers’ needs sufficiently. As you will see, we are tackling the root causes of the high failure rates systematically, providing superior answers to the key challenges of understanding customer needs, moving from customer need to product and truly verifying Problem/Solution Fit as well as Solution/ Market Fit. Finally, we will provide you a framework that accelerates growth while minimizing failure along the way.
403
An introductory article is available here: https://bit.ly/3zzXYg6 (Wilson 2009). However, anecdotal evidence is available all around us. Just one example: our fear of losing money is proven to be more important than the hope of winning money. For this reasons, most people barely invest in the stock market, keeping their hard-earned money instead in a checking account that yielding negative returns due to inflation. This is totally crazy, if you think about it!
404
Read more about understanding your customers Jobs to be Done in this insightful article by Clayton Christensen in the Harvard Business Review : http://bit.ly/2qMUlnc .
405
Design thinking and similar approaches typically applied in the Problem/Solution Fit stage have the downside that they are ideation based. Relying on ideation presents several significant challenges: (1) You are unsure whether you are identifying ideas that solve a customer need; (2) You are unsure whether those ideas are relevant to your organization; (3) There is a lack of clarity about whether you can execute those ideas (4) It is not optimized for leveraging any differentiating assets or capabilities you may have; and (5) it is thus unclear whether the ideas you create have any practical value.
406
The original article, entitled “It takes 100 ideas for one to fly,” can be found here: https://bit. ly/3fzsHP4
407
With regards to the different methodologies of JTBD, we suggest considering the book by Jim Kalbach, entitled The Jobs To Be Done Playbook (2020).
408
The original Job Map was published in an article in the Harvard Business Review: https://hbr. org/2008/05/the-customer-centered-innovation-map .
409
See the following article for more details: https://bit.ly/3weR3pG . The concept was originally invented by Strategyn (see strategyn.com) under the title “Desired Outcome Statements.”
410
An efficient way to represent the data in the visualization is to use the Top 2 Box method. With this method, you don’t represent all the survey respondents’ answers in the graph. Rather, you add the total percentage of responses belonging to the two top responses. For example, if 18% gave the score 10 and 21% gave the score 8 on a certain criterion, you use the number 39% in the graph, which would translate to 7.8 in the Job Journey Navigator.
411
he Swiss-based firm Vendbridge is a consultancy specializing in turning innovation initiatives into growth through customer focus. The firm has been a thought leader in Jobs to be Done for more than 15 years and originated, amongst other useful frameworks, the Job Journey Navigator we use here. Vendbridge is happy to share their wisdom and knowledge about how to apply Jobs to be Done in practice at www.vendbridge.com
412
Read more on the Job Journey Navigator, originally created by Vendbridge: https://bit. ly/3k6572d .
413
Strategy’s Innovation Track Record Study, which compares different innovation methods, can be downloaded here: https://bit.ly/3xAiwDP . The results are from the year 2010, but nothing has changed significantly in our experience. Due to the poor innovation results and the incapacity of most firms to manage innovation, many incubators around the globe have been closed. The relative success of JTBD should not be a surprise: a targeted innovation approach of course outperforms ideation/luck based methods.
414
On start-up and corporate innovation failure rates, read for example https://bit.ly/3lAJZPR , https://bit.ly/3pyyniA or https://bit.ly/3npOHjR .
415
CB Insights conducts the largest global study of start-up failure rates. To date, 378 start-up failures have been analyzed post-mortem. The findings are continuously updated and great to learn from. Many of the top failures are related to insufficient customer understanding and could to some degree have been resolved through Jobs to be Done. Read more here: https:// bit.ly/3lEDv2f (CB Insights 2020) or find the short version of the top 20 here: https://bit. ly/3a2YsRw
416
Design Thinking is a great methodology. A frequent issue in its application, however, is to start with much too broad of a potential solution space. Design Thinking works great when the solution space is narrow. But the methodology has not been built for broad option spaces
417
Moonshots live in the gray area between audacious goals and pure science fiction. Instead of mere 10% gains, they aim for 10x improvements . The combination of a huge problem, a radical solution to that problem, and the breakthrough technology that just might make that solution possible, is the essence of a moonshot. Have a look at this brief but inspiring video introducing the concept http://bit.ly/2ixzem6 or review this somewhat longer SlideShare with examples http://bit.ly/2ixzem6 .
418
The Value Proposition Canvas is a part of the larger Business Model Canvas. It helps to project, test and build the business Value Proposition in a more structured and reflective way, just as the Business Model Canvas helps you do so during the process of designing a Business Model. A great introduction is available here: http://bit.ly/2oMEJdP (Osterwalder 2015). We prefer an adapted version of the Value Proposition Canvas. Find the details on page <>.
419
Experience Maps are basically a visual representation that illustrates a user’s flow (within a product or service), their needs, wants and expectations, and the overall experience for a particular goal. There’s a great free e-book that provides an introduction at http://bit. ly/2n0C0RT (Schauer et al. 2013). Also, here is a Medium post on how to build Experience Maps: http://bit.ly/2op4gNT . To go beyond and gain a full picture, Jim Kalbach has written a full book on Mapping Experiences which provides an excellent summary (Kalbach 2020).
420
A comparison of the different UX mapping methods is available from the Norman Nielsen Group: https://bit.ly/3gIiukE . It covers the four commonly used tools: Empathy Mapping, Customer Journey mapping, Experience Mapping and Service Blueprinting, and when to use which tool.
421
More on anti-goals in this article on Medium: https://bit.ly/3ir5zEt .
422
The original Dropbox video can be viewed here: https://bit.ly/3lDk4qr .
423
A Potemkin village is any construction whose sole purpose is to provide an external façade without any real backing. The term comes from stories of a fake portable village built by Grigory Potemkin, former lover of Empress Catherine II, solely to impress the Empress during her 6-months inspection journey to Crimea in 1787.
424
For a fuller definition of MVP, see https://bit.ly/3nl6Yiz and https://bit.ly/3qTund0
425
In his article “The Downside of Applying Lean Startup Principles,” Andrea Contigiani, a researcher at the Wharton Business School discusses the risk of imitation: https://whr. tn/36Pya26 .
426
Learn more about the Google Design Sprint from the makers: https://www.gv.com/sprint/ . The approach is smart, but there are obviously limitations as to what you can achieve in five days.
427
Read the interview with Andrea Contigiani, a researcher at the Wharton Business School on the limitations of Lean Startup principles: https://whr.tn/36Pya26 (Contigiani 2018).
428
The company Fluidmobile outright declares that “the MVP is a thing of the past”: https://bit. ly/2IBtpBb .
429
Read more on the concept of Simple, Loveable and Complete in this thought-provoking article from serial entrepreneur Jason Cohen “I hate MVPs. So do your customers. Make it SLC instead”: https://bit.ly/2ILgZ9v
430
There is a great in-depth article available discussing the sunk cost fallacy: https://bit. ly/3hZ4x3Z .
431
The Business Concept Evaluation Board or “The BIG 8” is inspired by the work of serial entrepreneur Bill Gross. He examined over 200 start-ups to figure out what makes a start-up successful and built a list of the five most important reasons for success. See his TED talk here: https://bit.ly/2IVqPpP . The Big 8 adapts his concept to the context of corporate innovation and the MVP stage in particular.
432
In agile approaches, a retrospective is a meeting held after a product ships. In the retrospective meeting, the team discusses what happened during the product development and release process, with the goal of improving things in the future based on those lessons and conversations. Read more about retrospectives on scrum.org: https://bit.ly/36Pe73O .
433
There are a number of different studies around the strategy-execution gap; see for example this interesting article in the Harvard Business Review: https://bit.ly/2TH10Pm .
434
The concept of an Operating Model Canvas was originally developed by Andrew Campbell and his colleagues. We have developed an iteration of it that will consider additional aspects and that is more geared towards innovation. If you want to learn more on the topic, please consider their book entitled Operating Model Canvas . The book provides numerous examples and offers related tools (Campbell, Gutierrez and Lancelott 2017).
435
The original concept of core activities, supporting activities and Value Chain came from Michael E. Porter. In his groundbreaking book Competitive Advantage , Porter explores the underpinnings of competitive advantage in the individual firm. Competitive Advantage introduces a whole new way of understanding what a firm does. Porter's concept of the Value Chain disaggregates a company into "activities," or the discrete functions or processes that represent the elemental building blocks of competitive advantage (Porter 1998).
436
Porter wrote in 1980 that any strategy must target either cost leadership, differentiation, or focus (on a segment, applicable to small companies only). He discussed the idea that practicing more than one strategy dilutes the focus of the organization. The argument is based on the fundamental premise that differentiation will incur costs to the firm; thus reducing costs is at odds with differentiation. In other words, you cannot be both the best and the cheapest. It has been proven, however, that a combination of those strategies is possible and can lead to lasting competitive advantage for the (very) few firms that manage to achieve it. Originally published in Porter 1980.
437
Learn more about the implications of choosing a particular Value Discipline on an Operating Model here, http://bit.ly/3sGnOvh , or deep-dive by reading the book from the inventors of the concept (Treacy and Wiersema 1997).
438
The concept of Value Chains as decision support tools, was added onto the competitive- strategies paradigm developed by Porter as early as 1979. In Porter's Value Chains, Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, and Service are categorized as primary activities. Secondary activities include Procurement, Human Resource Management, Technological Development and Infrastructure (Porter 1985, 11–15). Read more on Value Chain’s and Porter’s contribution on the Wikipedia page: https://bit.ly/3aLs5oK .
439
OKRs were invented at Intel and made popular by John Doerr, who has written the most prominent book on the topic Measure what Matters (Doerr 2018). The book’s website contains a number of useful tools and an introduction to the topic: https://www.whatmatters.com .
440
You do not want to spend scarce resources on costly legal advisors early on. Even if legal advice comes free of charge because the parent organization pays for it, stay clear of this temptation. “There is no such thing as a free lunch,” as Milton Friedman used to say, and furthermore, it is just a waste of your valuable time at this point
441
From Dan Ariely’s went as far as stating » You are what you measure « in this interesting article in the Harvard Business Review , available here: http://bit.ly/2pRlQXZ (Ariely 2010) .
442
“Act in Netflix’s Best Interest” is actually the policy Netflix uses for Expensing, Entertainment, Gifts and Travel. We at Digital Leadership use the same policy, and in the last few years, we have not had a single major problem with this policy. Quite on the contrary, it enables all of us to make decisions and creates a feeling of trust, which might be the key business enabler. Trust has a bottom-line impact on results and that when trust goes up, speed goes up while costs come down. This principle applies not only to professional relationships with customers, business partners, and team members, but also in our personal relationships, which makes the concept even more valuable. If you want to read more on trust, we recommend Covey and Merrill 2008
443
The Growth Tribe provides has originally developed the Growth-Hacking process. They provide relevant training on this topic (and others as well). See https://www.growthtribe.io/ .
444
Customer Personas are detailed representations of segments within your target audience. Fueled by data-driven research, they map the “who” behind the buying decisions of customers. Insights from customer Personas can help improve copy, tailor targeting, and inform product development. Great Personas, however, do not just appear. You have to start with research and importantly base your Personas on real data. This post shows you how to do it right: https:// bit.ly/31ocp7R .
445
Croll and Yoskovitz’s Lean Analytics: Use Data to Build a Better Startup Faster is one of the most relevant innovation books ever written. Whether you are a start-up founder trying to disrupt an industry or an intrapreneur trying to provoke change from within, your biggest challenge is creating a product people actually want. Lean Analytics steers you in the right direction. See Croll and Yoskovitz 2013.
446
The Falsification Principle, proposed by Karl Popper, is a way of demarcating science from non-science. It suggests that for a theory to be considered scientific it must be able to be tested and conceivably proven false. For example, the hypothesis that "all swans are white," can be falsified by observing a black swan. Popper replaced the classical observationalist-inductivist account of the scientific method with falsification (i.e. deductive logic) as the criterion for distinguishing scientific theory from non-science. Find more information here: https://bit. 10 – ANNEX 455 ly/3GD5Oc0 or read the full book “The logic of scientific discovery” (Popper, 1959). 426 - Read the interview with Andrea Contigiani, a researcher at the Wharton Business School on the limitations of Lean Startup principles: https://whr.tn/36Pya26 (Contigiani 2018).
501
In the landmark book “From Good to Great,” Jim Collins uses the image of the flywheel, the part of a car’s engine that keeps it spinning when you take your foot off the gas, to describe successful companies. What he means by this is that no matter how dramatic the end result, good-to-great transformations never happen by themselves. Rather, the process resembles relentlessly pushing a heavy flywheel, turn upon turn, building momentum until a point of breakthrough, beyond which the inertia of the wheel takes over. Getting to this point requires that everyone in the organization pushes in the same direction. A well-explained strategy has just this federating effect. Thus, the core purpose of a strategy is to delineate a clear plan for achieving your goal and to align your team around it.
502
Both are variations on the quote, “No plan of operations reaches with any certainty beyond the first encounter with the enemy's main force,” from Field Marshall Helmuth Graf von Moltke. Strategy is a field that originally came from the military, which is why a lot of the vocabulary used in strategy is military in nature. More information on Helmuth Graf von Moltke is available here: http://bit.ly/2poKBhr . Moltke was the student of Carl von Clausewitz, one of the key figures in the invention of modern (military) strategy. Other key books on the origins of (military) strategy include The Art of War by Sun Tzu (originally published in the 5th century BC), The Prince by Nicolo Machiavelli (originally published in 1532), and On War by Carl von Clausewitz (originally published in 1832).
503
Fabled start-up guru Steve Blank might have summarized the challenges of a business plan approach to innovations best in his blog article “No Plan Survives First Contact with Customers – Business Plans versus Business Models.” See https://bit.ly/3xjmdxy and also Blank 2010.
504
For a great article on resilience, see “How to Thrive in Turbulent Markets” (Sull 2009): http:// bit.ly/2ABdHNZ
505
The concept of a self-governing organization has numerous roots in history, physics, biology, philosophy, business and other fields. It is based on well-known methodologies like lean/ agile, sociocratic, integral, anthroposophical, systemic and systems theory teachings. Bernd Oestereich and Claudia Schroeder have summarized these concepts under the term the “Collegial Leadership Model” and have advanced the thinking on this topic. Here, we are leveraging numerous suggestions from their work. For German speakers, we recommend checking out their website https://kollegiale-fuehrung.de and their book (Oestereich and Schröder 2016).
506
Scrum is a Project-Management methodology that offers a framework for developing, delivering, and sustaining products in a complex environment. It was initially used in software development but has since spread to other fields, including research, sales, marketing and advanced technologies. The scrum methodology was originally developed in the 1990s and has since become the goto method globally for agile project delivery. It is designed for teams of ten or fewer members, who break their work into goals that can be completed within time-boxed iterations, called sprints, most commonly with a two-week duration. The scrum team assesses progress in time-boxed daily meetings of 15 minutes, called daily scrums (a form of stand-up meeting). At the end of the sprint, the team holds two further meetings: the sprint review, which demonstrates the work done to stakeholders in order to elicit feedback, and the sprint retrospective, which enables the team to reflect and improve. We recommend the book Scrum: The Art of Doing Twice the Work in Half the Time by Jeff Sutherland (2015), one of the founding fathers of scrum, as a starting point.
507
The creation of a new role includes a definition and documentation of the following core
elements:
>
What is the name of the role?
>
What are the tasks and responsibilities of the role?
>
To which circle does the role belong?
>
How will the role holder be chosen?
>
At what interval and under what conditions should the role be filled or occupied?
>
Who currently owns the functions that are to be performed by the new role?
508
360° feedback (also: 360-degree feedback, survey, assessment or multi-rater feedback) is a method for assessing the competencies and performance of colleagues from different perspectives, such as from the point of view of employees, supervisors, colleagues, suppliers or customers.
509
- In Collegial Consulting, professional peers work together to find solutions to a concrete problem (or "case"). In a 45-minute session, the "case giver" describes the situation to the "advisors" and is advised by them. The advisors do not have to be directly involved in the case. The basic procedure is as follows: > 10 min: The case giver presents the case. > 5 min: Advisers ask informational and comprehension questions about the case, no discussions. > 20 min: The case giver listens and takes notes on the advisors’ discussion of the case. The advisors discuss possible solutions, ideas and potential problems. > 5 min: The case giver reflects on the question, “What is my takeaway?” > 5 min: The group reflects on, “What do we all learn from this?
510
BarCamps are open, participatory workshop events, the content of which is provided by participants. They are also known as unconferences. Find more details here: https://bit.ly/3xVYXsx
511
A hackathon is traditionally a workshop that lasts several hours to several days in which computer programmers and others involved in software development, including graphic designers, interface designers, product managers, project managers, domain experts, and others collaborate intensively on software projects. The goal of a hackathon is to create functioning software or hardware based on certain specifications by the end of the event. The method can, however, be used for small projects that are not computer related.
512
A kanban board is one of the tools that can be used to implement kanban, Japanese for “visual signal,” to manage work at a personal or organizational level. Kanban boards visually depict work at various stages of a process using cards to represent work items and columns to represent each stage of the process. Cards are moved from left to right to show progress and to one out of the loop? Or did you opt for continuing without clarifying anything, in order to avoid being perceived as someone who is unaware?" Read more in Rozovsky 2015: http://bit. ly/2BOLdAb help coordinate teams performing the work. A kanban board may be divided into horizontal "swimlanes" representing different kinds of work or different teams performing the work. Kanban boards can be used in knowledge work or for manufacturing processes. Simple boards have columns for "waiting", "in progress" and "completed" or "to-do", "doing", and "done". Complex kanban boards can be created that subdivide "in progress" work into multiple columns to visualize the flow of work across a whole value stream map .
513
Dunbar’s number is an estimate of the maximum number of people with whom one can maintain stable, meaningful social relationships—relationships in which an individual knows who each person is and how each person relates to every other person. In 1990, anthropologist Robin Dunbar estimated the number to be around 150
514
If you want to do a deep dive on the topic of OKRAs, we suggest considering the following resources: - John Doerr’s Measure What Matters (2018) is a seminal book on the topic. It discusses OKR in depth as a simple but brilliant tool for strategic goal setting in organizations. To illustrate this tool, Doerr provides many examples, from Google to the Melinda and Bill Gates Foundation to ONE, in short, accessible chapters. An excerpt of Google's OKR process is also given, which provides a useful orientation to the topic. As icing on the cake, the author provides many stories and personal narratives from his vast Silicon Valley experience. - John Doerr also had a TED talk in 2018 titled “Why the secret to success is setting the right goals”: https://bit.ly/39TCmTp . - Ben Lamorte has written A Step-by-Step Guide for Objectives and Key Results Coaches (2022). This is the first book dedicated to OKR coaching. Rather than providing a simple introduction, this book is written for external and internal coaches looking to take their OKR coaching skills to the next level. It provides a comprehensive framework to guide users through the phases and steps necessary to make your OKR coaching project a success. - Paul R. Niven and Ben Lamorte have also written a comprehensive reference guide on the topic, titled Objectives and Key Results: Driving Focus, Alignment, and Engagement with OKRs (2016). - Andreas Rein provides a critical discussion of OKRAs in his book Steampunk Economy: Steam Engine to the Moon (2021).. - Google Ventures created a longer video where they explain “How Google sets goals: OKRs/ Startup Lab Workshop” https://bit.ly/39uNVQH . - And last but not least, the Flight Club discusses the OKR Pilot Approach they took at the supermarket chain REWE Digital here: https://bit.ly/3FQB9Ix .
515
The Stage-Gate process is sometimes referred to as a waterfall process. This is not quite the case, since it operates at an entirely different level as compared to agile methodology. To quote its inventor, "Stage-Gate is a macroplanning process and agile is a microplanning project management methodology." A highly interesting debate on how to marry Stage Gate and agile is “The AgileStage-Gate Hybrid Model" (Cooper 2016) : https://bit.ly/2Z6y81H .
516
Google’s Project Aristotle was a large-scale longitudinal study which sought to find the key factors which allow teams to succeed. They found psychological safety to be the foundation: "[It]’s the underpinning of all other dynamics. How could that be? Taking a risk around your team members seems simple. But remember the last time you were working on a project. Did you feel like you could ask what the goal was without the risk of sounding like you’re the only one out of the loop? Or did you opt for continuing without clarifying anything, in order to avoid being perceived as someone who is unaware?" Read more in Rozovsky 2015: http://bit. ly/2BOLdAb .
517
Explore the exciting work Steve Blank did with a leading corporation with the objective of “getting to yes”' for corporate innovation: http://bit.ly/2zSAR0X .
518
EBITDA is a key profitability figure corporations use; the term stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
519
Explore this concept further in Dan Ariely’s 2010 Harvard Business Review article: http://bit. ly/2pRlQXZ .
520
Read more on the value of keeping customers in this Harvard Business Review article by Amy Gallo, "The Value of Keeping the Right Customers" (2016): https://bit.ly/31fXLjp
521
Net Promoter Score (NPS) is an easy-to-implement digital tool that can be used on any website to gauge the loyalty of a firm’s customers. It serves as an alternative to traditional customer satisfaction measures and may, in fact, be the only number you really require in order to judge a company’s health, since it is strongly correlated to key indicators such as revenue growth. More details can be found in this informative article http://bit.ly/2AmUzou or in the book, Loyalty Rules! How Leaders Build Lasting Relationships (Reichheld 2001).
522
To quote Bain & Company, the company that invented the Net Promoter Score, “In most industries, Net Promoter Scores explained roughly 20% to 60% of the variation in organic growth rates among competitors. On average, an industry’s Net Promoter® leader outgrew its competitors by a factor greater than two times.” See https://bit.ly/3muCydh . For even more detail, read Reichheld 2001.
523
Based on a slide from an original presentation by Hendrik Kniberg, available here: https:// bit.ly/3y4FYt4 .
524
Under Josh Pigford’s Open Startups Initiative, seven start-ups began publicly reporting on their revenue metrics. As of July 2021, about 23 start-ups were publicly sharing their monthly key figures. Please see this inspirational example of how start-ups measure progress: https:// baremetrics.com/open-startups
525
There is extremely poor data available about the number and quality of corporate incubator/ incubation facilities/programs vs. corporate accelerators. While there is plenty of information available on corporate incubation activities, there is hardly anything available with regards to corporate accelerators. The Database of Corporate Accelerators shows a mere 71 corporate accelerators globally, see https://bit.ly/3o5rwvq .
526
The divide between digital capabilities supporting the early incubation phase and capabilities available to support acceleration/scaling is, according to one HBR article, one of the biggest reasons why digital transformation fails. See Sutcliff, Narsalay and Sen 2019 at https://bit. ly/3iaz0v5 .
527
Read more about the idea of creating separate policies for the execution vs. innovation teams from Steve Blank (2015): http://bit.ly/2zSAR0X .
528
Dan Ariely goes as far as to say, “You are what you measure,” in this interesting Harvard Business Review article (2010): http://bit.ly/2pRlQXZ .
601
Meme is a word originally coined by the late biologist Richard Dawkins in his book The Selfish Gene (1976) to describe self-replicating units of culture. Just as a gene is the fundamental unit of our DNA, he argues that memes are the fundamental unit of culture. Thus, the cultural evolution of humans is shaped by memes. Both genes and memes are units of information. A meme acts as a unit for carrying cultural ideas, symbols, or practices, and they can be trans - mitted from one mind to another through writing, speech, gestures, rituals, or other imitable phenomena with a mimicked theme. Memes determine mindsets, beliefs, behavior and values and form the basis for every form of culture. Unfortunately, in recent years, “meme” has come to mean a piece of media, often humorous, that spreads virally through the Internet, especially on social media. In order to avoid confusion with this current definition, we will use the more common word, “aspect.”
602
AIESEC defines its larger purpose as “To help humankind reach its potential.” More specif - ically: “AIESEC is a global platform for young people to develop their leadership potential through international internships and volunteer opportunities. Founded in 1948, AIESEC is a non-governmental and not-for-profit organization entirely run by youth for youth.”
603
The book Exponential Organizations (Ismail, Malone, Geest and Diamandis 2014) is a guide to navigating the shifting business environment due to the introduction and proliferation of ex - ponential technologies. The book is an effective wake-up call and helps better understand the impact of exponential technologies. The solution pattern proposed – “the exponential organi - zation” – and what it should do based on eleven patterns falls short, however, of identifying all critical fields. An arguably better approach might be the UNITE Exponential Growth Canvas, which we will discuss later in the Business Model chapter
604
“A love for bad drafts” is one of Digital Leadership’s most important principles. Most people find it easy to criticize a draft, but they often struggle to come up with a draft in the first place and are afraid to share it until they think it is really “finished.” By this point, the document may have gone in an entirely opposite direction from the one originally intended. Our “love for bad drafts," therefore, has the goal of getting to a first version very quickly, which then allows iteration. Depending on the complexity of the task, we typically allow for between 20 minutes and 2 hours to come up with an initial version. Then, improving the "bad draft" is easy, and a cycle of iteration begins.
605
If you are looking for ideas for rituals, please consider the book, Rituals for Work: 50 Ways to Create Engagement, Shared Purpose, and a Culture that Can Adapt (Ozenc and Hagan 2019).
606
Without question, hiring is the ultimate business priority. With the right team on board, any problem can be solved. Without it, we will inevitably fail. Learn more from Eric Schmidt, for - mer president of Google’s board, in this important talk, https://bit.ly/3DIu22v , or consider the book, How Google Works , in which Schmidt and colleagues discuss the crucial role of hiring in business (Schmidt, Rosenberg, Eagle and Page 2015).
607
7 The Moving Motivators were created by Jurgen Appelo and derived from the work of Dan - iel Pink, Steven Reiss, and Edward Decias well as the CHAMPFROGS model for intrinsic motivation. Learn more here: https://bit.ly/352Lpzr . Or : https://bit.ly/3p8hLQW , https://bit. ly/2XjrJDC , and https://bit.ly/3FS1QfC .
608
This is a simple explanation of the game: www.youtube.com/watch? v=XeS1uqqKQvs&t=138s
609
Learn about StoryCubes here: : https://bit.ly/3p2UX56or here, https://bit.ly/3p2UX56 and https://apple.co/3lKa1mf. Multipoly is another greating hiring game, learn about it here: https://bit.ly/3BM9plw.
610
Johann Christoph Friedrich Schiller (1759–1805) is best known for his immense influence on German literature. In his relatively short life, he authored an extraordinary series of plays, including The Robbers, Maria Stuart, and the trilogy Wallenstein. He was also a prodigious poet, composing perhaps most famously the “Ode to Joy,” featured in the culmination of Beethoven’s Ninth Symphony and enshrined, some two centuries later, in the European Hymn. In part through his celebrated friendship with Goethe, he edited epoch-defining literary journals and exerted lasting influence on German stage production. He is sometimes referred to as the German Shakespeare; his plays are still among the most widely produced German plays both in Germany and internationally
611
Read more about Schiller and his view of play here : https://stanford.io/3AP3MBI .
612
Michael Assauer is a German serial entrepreneur and product manager in the automotive industry. He seems to first have documented the TEV system as part of a small book and newsletter titled “66 talent hacks.” The content is unfortunately only available in the German language, see here: https://bit.ly/2YQRMTx.
613
More on the topic of collegial leadership is available in the book from Bernd Oesterreich and Claudia Schröder (2020) or more extensively in the earlier German edition (Oestereich and Schröder 2016); the latter book is unfortunately only available in the German language.
614
Another source is: https://bit.ly/3pc0AgK This wiki (available in various languages) is based on the book Reinventing Organizations by Frédéric Laloux. Its primary purpose is to serve as a practical guide for leaders who are reinventing their organization and are looking for inspiration as they upgrade to specific teal management practices in their organization.
615
Read more about Abraham Maslow’s 1943 theory of the hierarchy of needs here : https://bit. ly/3IgRzKt.
616
In terms of communication, Marshall Rosenberg has written the absolutely game-changing book, Nonviolent Communication: A Language of Life: Life-Changing Tools for Healthy Relationships (Rosenberg 2015). Rosenberg’s dynamic communication techniques transform potential conflicts into peaceful dialogues and create compassionate connections. A somewhat longer summary of nonviolent communication is available here: https://bit.ly/3HboIWF.
617
The key factors to create a climate of psychological safety are the ability to empathize and appreciate and to express those feelings.
618
If you want to learn more about the concept of “feedforward,” we suggest reading the following introductory article from the inventor of the concept, Marshall Goldsmith, entitled “Try Feedforward Instead of Feedback”: https://bit.ly/3DYvwpu. If you want to really go deep consider the book from Joe Hirsch, entitled The Feedback Fix: Dump the Past, Embrace the Future, and Lead the Way to Change (Hirsch, 2017).
619
Frederic Laloux has written a breakthrough book titled Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness in 2014. It lists the different paradigms of the human organizations through the ages and proposes a new one: the teal organization. The latter is built on three pillars related to wholeness, self-management, and evolutionary purpose. The quote is from the illustrated version of the book titled: “Reinventing Organizations: An Illustrated Invitation“, see page 123.
620
This is applicable across cultures. Researchers Paul Ekman and Gaven Yarney discovered that several facial expressions that denote emotions such as fear, anger, sadness, joy, and surprise are universal and that people can easily read these expressions in people from different cultures (2004): https://bit.ly/3LTQ7A6.
621
“Consent originated from the consensus tradition of Quakers, was adopted by the Sociocratic movement of the mid-20th century, and then formalized by Gerard Endenburg in the 1970s. Consent has become increasingly popular among engineering and technology firms over the last decade because it attempts to combine both speed and inclusiveness.” Read more about ConsenT decision-making on the following website: https://bit.ly/2ZaGWqV.
622
Ibid.
623
Learn more about Consultative Decision-making here: https://bit.ly/3GaJiqT.
624
The website www.thedecider.app describes a number of relevant decision-making models (including autocratic, avoidant, consensus, consent, consultative, delegation, democratic and stochastic). Based on a few straightforward questions, the website even suggests relevant decision-making options for your particular context. If you want to deep-dive on the topic of decision-making, there are a number of excellent books available on this topic; a good starting point might be the HBR Guide to Making Better Decisions (2020).
701
Boston Consulting Group says this about the effectiveness of Business ModelBusiness Model Innovation: “We analyzed our database of innovators, segmenting them into Business ModelBusiness Model innovators and product or process innovators. Our analysis showed that while both types of innovators achieved a premium over the average total shareholder return for their industries, Business ModelBusiness Model innovators earned an average premium that was more than four times greater than that enjoyed by product or process innovators. Furthermore, BMI delivered returns that were more sustainable; even after ten years, Business ModelBusiness Model innovators continued to outperform competitors and product and process innovators.” (Lindgardt et al. 2009).
702
The Business Model Canvas, originally developed by Alexander Osterwalder is the mostly commonly used tool for developing BM. It draws on Michael Porter’s Value Chain maps and Peter Drucker’s theories of the firm (among other sources). A 2 min video introduction about the original model can be found here : http://bit.ly/1cLY1Gu. Alternatively consider the related book with practical examples, Business Model Generation (Osterwalder and Pigneur 2013). A sneak preview of the book is available here: http://bit.ly/2eha87z. Consider in this context also the LEAN Canvas: https://leanstack.com. It provides a clear order and provides additional focus on the customer problem, developing key metrics and the concept of Unfair Advantage. A more detailed discussion is available here: http://bit.ly/2ow9KU3 (Maurya 2012).
703
Learn more about the background of Thomson’s iterated Value Proposition Canvas here: http://bit.ly/2phskAf (2013). The original Value Proposition Canvas was created by Alexander Osterwalder/Strategyzer.
704
For a deeper discussion of the Customer Profile Canvas consider reading an introductory article by its originators: http://bit.ly/2nNcVZi (Guppta 2016).
705
See Gray, Brown and Macanufo 2010.
706
The following article explains the important concept of “Reasons to Believe” (RTB) in marketing: https://bit.ly/3B2MZwh.
707
For a detailed discussion of Porter's Five Forces analysis consider see his original article in the HBR: https://bit.ly/3hDaNiL. For a fuller discussion, see his book Competitive Strategy (Porter 1980).
708
Instructions to conduct a Business ModelBusiness Model Environment workshop are available here: http://bit.ly/2pyLKUc (Amarsy 2017).
709
Learn more from this interesting Harvard Business Review article on the ideal breadth of your product/service mix, who should own decision-making in a venture and who, in a networked world, is actually best placed to make decisions: http://bit.ly/2AcpnZA (Girotra and Netessine 2014).
710
Porter’s Five Forces analysis is a framework for analyzing the level of competition within an industry and business strategy development. It measures the “Industry Rivalry” based on four impacting factors: the Bargaining Power of Suppliers, the Threat of Substitutes, the Bargaining Power of Buyers and the Threat of New Entrants (Porter 1980).
711
The entire domain of business administration and management is largely focused on very large enterprises. This ignores that our economies are mostly driven by small and mid-sized companies. Many models of understanding and working simply do not work for smaller organizations. Porter’s Five Forces is just one of many examples here, the BCG matrix being another one. Assessing your competition is tough if you do not have just five other main players in the market (as is the case for example in the auto industry), but are facing hundreds of competitors.
712
Learn more about the definition of Red vs. Blue Oceans from the creators of the concept: https://bit.ly/3wETPon.
713
Johnson, Christensen and Kagermann 2010, 48-54. Available at: http://bit.ly/2q6FyzU.
714
The BCG study on the most innovative companies is available here: https://on.bcg.com/2Te49pv (BCG Perspectives 2021).
714
Ibid.
715
(Gassmann, Frankenberger and Csik 2014, 10).
716
Lindgardt et al. 2009.
717
Chesbrough 2010: http://bit.ly/2jug2Ce.
718
The BCG study on the most innovative companies is available here: https://on.bcg.com/2Te49pv (BCG Perspectives 2021).
719
BCG, “Why Business ModelBusiness Model Innovation Is Relevant Today.” Detailed numbers available online at: http://on.bcg.com/2oOOEjJ (Lindgardt et al. 2009).
720
BMI is a continual process. For an excellent analysis of how Netflix and other innovative companies have conducted BMI, see Business Model Pioneers: How Innovators Successfully Implement New Business Models (Voigt, Buliga and Michl 2017) or The Business Model Innovation Factory: How to Stay Relevant When The World is Changing (Kaplan 2012)
721
This team studied more that 350 Business Model innovators and found out that about 90% of their innovations were recombinations of previously existing concepts, ideas, or Business Models. To read their original article, go to: https://bit.ly/3giBYNU.
722
Ibid.
723
Berns 2010.
724
Although if you want to, we would recommend The Business Model Navigator (Gassmann, Frankenberger and Csik 2014).
725
See Ten Types of Innovation (Keeley et al. 2013). Their groundbreaking work cannot be valued highly enough, even if it does not address all components of a Business Model. An online version of the ten types of innovation is available here: https://bit.ly/3v8ODbD.
726
To access the book 55 Business Models, as well as a set of useful tools, go to http://bit. ly/2pV9n9L (Gassmann, Frankenberger and Csik 2014, xi).
727
See https://businessmodelgallery.com for further details.
728
Clearly, not all Business Models are designed to maximize growth. Taking a historical perspective, the believe in infinite growth is new, and many business owners may have no desire to grow strongly or even exponentially. So, figure out what you want and WHY you want to grow. After all, a strong why will answer any how.
729
The original quote comes from the German philosopher Friedrich Nietzsche, who wrote, "He who has a why to live for can bear almost any how."
730
10–20 years ago the biggest companies were banks and oil companies. Today it is mostly technology players. Take a look at the S&P 500 listing by weight: https://bit.ly/3zjuNNd.
731
The book Exponential Organizations: Why New Organizations are Ten Times Better, Faster, and Cheaper Than Yours (and what to Do about It) was pivotal in showing organizations how they could create exponential growth. The book is well worth reading. However, the 11 attributes of exponential growth that it outlines may fall short of covering all possible avenues of growth, since they only cover certain aspects of the full Business ModelBusiness Model Innovation spectrum.
732
An excellent discussion of how “strategically managing knowledge, innovation, and outsourcing combine to create a company’s greatest future challenge,“ including a discussion of “bestin-world capabilities” can be found here: : https://bit.ly/3iDu04K. For more, consider Hahn and Kaufmann 2002.
733
With regards to banks spending on compliance and maintenance, see e.g., here: https://bit. ly/2P0aoaP. If you are generally interested in the banking industry and are looking for more details, we suggest to review a full report from McKinsey which heavily discusses this matter: https://mck.co/2P1UvRh (McKinsey, 2019).
734
Ibid.
735
Read the full story of how Apple has approached disruption in this interesting article from the Harvard Business Review, "Steve Jobs Solved the Innovator’s Dilemma":: (Allworth 2011).
736
The difference between those fighting to win and those trying to avoid losing is always crucial. Read more here: https://bit.ly/3pTEMp5.
737
See “‘Beyond Petroleum’ No More? BP Goes Back to Basics”: http://cnb.cx/2qjF1df.
801
Numerous studies have been conducted on the failure rate of (digital) transformations. Most
seem to agree that about 70% of all digital transformations fail. Even most conventional transformations seem to be challenged: numerous studies point to a failure rateof about 60% on
average.
All big consulting companies developed their own studies on this topic; consider for example the study from McKinsey https://mck.co/3ACClwq (which comes up with 21 key recommendations) or the study from BCG https://on.bcg.com/3IMUYAy which provides 6 key recommendations) or the study from Bain https://bit.ly/3g6uD4d which sees the success rate of
transformations even lower.
While we agree with most recommendations across most studies, we feel they often seem to
miss the core point, reason why we have added this chapter to this book
802
2 There is limited statistical data available on the frequency of transformations, which is likely linked to the difficulty of getting reliable data in sufficient quantity. However, what is well studied is the length of economic cycles, which is about eight years long (recently the Covid pandemic in 2020, the subprime mortgage crisis in 2008, the .com crisis in 2000, the savings and loan crisis in 1992, etc.). During those economic downturns, organizations have to react to the crisis and, more often than not, reinvent themselves to adapt to the changing market realities. Find more on the pages of Econlib on the topic of business cycles, including an account of the Business Cycle Peaks and Troughs in the United States between 1890-2004: https://bit.ly/3KQuwbj. Additional causes of transformative change are often caused by technological advances and related cultural paradigm shifts, as we have discussed in chapter 2. Eight years happens to be the time period it takes large organizations to replace their main systems in the digital channels based on our observation
803
To learn more about systems thinking, consider reading the reference book in systems thinking written by Peter Senge. The book comes from and goes to the fundamentals of “problems” and expose the main “issues” with finesse (Senge, (2006).
804
- To read more about the 8-step process for leading change, consider starting with https://bit. ly/3oZM7lX, or read Kotter’s full book, Leading Change (Kotter, 2012).
805
If you want to learn more on Change Management, consider the book Leading Change by John P. Kotter (Kotter 2012) or consider the more practical, hands-on field guide (Cohen and Kotter 2009).
806
For further discussion of strategic moves, see Chris Zook, Beyond the Core (Zook 2003) and Profit from the Core (Zook and Allen 2010).
807
A study conducted between 2002 and 2004 by Bain Capital found that a 1-step move has a 35% chance of success, a 2-step move has 15%, a 3-step move has 8%, and a 4-step move (which they call diversification but is pretty much an H3 innovation) has less than 5%. We believe the chances can be much higher if you apply the practices in this book, However, the lesson is still obvious: staying closer to your core reduces the risk. A deeper discussion is available in the Harvard Business Review at the following link: https://bit.ly/3BAG39O.
808
Read more about strategic moves into close adjacencies in Chris Zook book “Beyond the Core” (Zook, 2003).
901
Some of you may recognize the structure of the Golden Circle from Simon Sinek here. The Golden Circle is a great conceptual model to use in this context. The UNITE Cultural Layers do thus conceptually rely on the same basis but extend the more simplistic Why-How-What structure to make it better applicable in a business context. Read more on the golden circle here: https://bit.ly/3gfILIp.
902
Jim Collins originally came up with Big Hairy Audacious Goals. Read more here: http://bit. ly/2OjMyGO.
903
What markets are ripe for disruption? Contribute your own ideas to Quora: http://bit.ly/37gw7Fe.
904
Read more on portfolio allocation in this inspirational article from the Harvard Business Review: http://bit.ly/2Zmi7Fi; (Nagji and Tuff 2012).
905
Maximizing revenues in the core business to invest somewhere else is a strategy that was originally called "milking the (cash) cow." It originates from the Growth-Share Matrix developed in 1970 by Bruce D. Henderson, founder of Boston Consulting Group. The matrix helps organizations allocate resources and is used as an analytical tool in brand marketing, product management, strategic management and portfolio analysis. Read more about it from the inventors of the concept: https://on.bcg.com/3la42Vc.
906
PowerPoint presentations force the audience to follow the presenters thinking slide-by-slide. That prevents depth and real discussions and does not allow people to pursue their own focus, interest and personal pace. A better approach to focus on content could be to start a meeting with a MindMap or document. Start with couple of minutes of focused reading and then have an informed discussion. A critical review of "The Cognitive Style of PowerPoint" is available in the excellent (and fun!) brief book from Edward Tufte (Tufte 2006).
907
Read more on the critical issue of the “corporate immune system” as it applies to innovation and transformation for example on Wikipedia: http://bit.ly/3apnHxm or in the following article from Salim Ismail, titled “Is Your Company Fighting Innovation?”: https://bit.ly/3rcdBIt.
908
The discussion of focus is a critical one. Without focus, you will not get anywhere. A great resource on this topic is the book The ONE Thing (Keller and Papasan 2019).
909
In the spring of 2001, 17 senior software developers adopted the so-called "Manifesto for Agile Software Development," today known mainly under the abbreviation the "Agile Manifesto." The first signatories, including the two Scrum founders Ken Schwaber and Jeff Sutherland, as well as Ward Cunningham, the inventor of the free Wiki software WikiWikiWeb, formulated the central values of agile software development for the first time with this document, which served as a milestone and at the same time the foundation of agile Project Management, laying out its generally binding guidelines. See the “Agile Manifesto” on the website https:// agilemanifesto.org.
910
For a more detailed discussion on why agile practices can cause you to focus on the wrong thing, read the highly relevant blog article by Jeff Patton: https://bit.ly/2CFrVCQ.
911
To understand the complete implications of accelerating change, consider the book The Day After Tomorrow by Peter Hinssen (2018). In this book, Hinssen writes about an exponentially changing world and its consequences for today’s organizations. He introduces those pioneers who managed to move (way) beyond tomorrow-thinking in innovation and were able to change the course of entire industries. Above all, he writes about the Business Models, organizational structures, talent, mindset, technologies and cultures needed to maximize our chances for survival in the day after tomorrow. A 1-hour presentation on the topic is available her: https://bit.ly/3h9bWMa.
912
The World Café methodology is a simple, effective and flexible format for hosting large-group dialogue, such as is required when you want to pull a larger group of employees together. It is relatively straightforward to apply and is based on seven design principles and one simple method. The ultimate objective is engaging with people on a topic that matters through a conversational approach. Based on the understanding that buy-in is critical and that conversation is a core process that drives personal, business and organizational life, the World Café allows you to engage a larger group, converge on solutions and gain (truly deserved) buy-in. Learn more about World Cafés from The World Café Community Foundation (TWCCF): https:// bit.ly/3lxxHdd.
913
PowerPoint presentations force the audience to follow the presenters thinking slide-by-slide. That avoids depths, strong discussions and does not allow people to pursue their focus, interest and personal pace. A better approach to focus on the content could be to start a meeting with a MindMap / Document, a couple of minutes of focused reading and then an informed discussion. A critical review of "The Cognitive Style of PowerPoint" available in the book from Edward Tufte (Tufte, 2006).
914
Peter Diamandis book Abundance is a great exploration of this. Diamandis also wrote an inspiring book entitled Why the future is better than you think . The book documents why our thinking about the future is so negative (too negative: there are plenty of reasons why to be optimistic!!!) and why he expects the future to present us with significant progress in all ma - jor aspects of human life (business, food, education, energy, water, freedom, health care etc.) (Diamandis and Kotler 2014).
Book How to Create Innovation