Intrapreneurship: Tackling The Challenges of Bringing New Innovation to Market

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Moderator:
Hector Del Castillo, CPM, CPMM @hmdelcastillo
Today’s Speaker
Presenter: Craig Rhinehart
Intrapreneur
Director, IBM Smarter Care Strategy and Market
Development
Software Group
http://CraigRhinehart.com
Craig@Rhinehart.com
@CraigRhinehart

CopyrightCraigRhinehart2014
Intrapreneurship:
Tackling The Challenges of
Bringing New Innovation to
Market
6
Craig Rhinehart
Intrapreneur
Director, IBM Smarter Care Strategy and Market Development
IBM Software Group
Blog: http://CraigRhinehart.com
Twitter: @CraigRhinehart
Email: Craig@Rhinehart.com
Information is my own and doesn’t necessarily
represent IBM’s positions, strategies or opinions

• Penicillin: When Alexander Fleming was looking for his wonder drug to cure diseases, he
probably never thought it would look like mold. Yes, had Dr. Fleming been a little more tidy
and a little less innovative, he might have just cleaned the mold from a contaminated Petri dish
he found. Instead, he noticed it was dissolving all the bacteria around it and investigated
further. Voila! Wonder drug.
• Pacemakers: Electrical engineer John Hopps was conducting research on hyperthermia when
he discovered that if a heart stopped beating due to cooling, it could be started again by
artificial stimulation. This led to the invention of the pacemaker, and countless lives have been
saved ever since.
• Microwaves: Percy Spencer of the Raytheon Company was conducting radar research with
vaccuum tubes when he accidentally melted a candy bar in his pocket. He put some popcorn
in his experiment, and thus was born the microwave popcorn industry.
• Corn Flakes: What happened the last time you left a pot on the stove too long? When John
Kellogg and his brother Will left a pot of boiled grain on the stove for several days, the
resulting mess became the launching point for their famous breakfast cereal.
• The Slinky: Naval engineer Richard Jones wasn’t trying to invent what is arguably the best toy
ever (your opinion may vary – see Silly Putty). He was working on tension springs designed to
monitor power on naval battleships when one of them fell to the floor. Killer Question from
that moment: Is this fun or what?
7
http://philmckinney.com/archives/2013/10/unintended-
consequences-5-innovation-failures-that-changed-the-world.html
… and they almost didn’t happen
5 Innovations That Mattered

• Background on Intrapreneurship
• Why Organizations Struggle to Commercialize Innovation
• Types of Innovation / Commercialization Process
• Real World IBM Commercialization Examples
• Invitation: Take The Survey - Get the Full Results and Report
• Q&A Session
Intrapreneurship Webinar Agenda
This presentation will feature preliminary findings from:
The First Annual Intrapreneurship Benchmark Survey on
Commercializing Innovation
8

"A person within a large corporation who takes
direct responsibility for turning an idea into a
profitable finished product through assertive risk-
taking and innovation”
Intrapreneur Defined
The term is generally credited to Gifford
Pinchot as far back as 1982
The American Heritage Dictionary:
• Not a perfect definition because every company has people who do this
• There is a collaboration and decision making component in support of risk taking
• Also requires strategy, execution and delivery of results
9

Intrapreneur Definition?
PRELIMINARY SURVEY FINDINGS
66%
32%
“the definition focuses on the executing part. It does not include
"coming up with ideas". Creativity is part of the making of
entrepreneurs and should be the same with Intrapreneurs”
“… an Intrapreneur could be a member of an
intrapreneur team driving a part of the effort”
“needs to say something
about overcoming
obstacles”
“Employees in larger
organizations DO
NOT take risks for fear
of job loss”
“why does the
corporation have to
be large?”
“It might be that the idea isn´t a
product, but a simple change on the
way something is done or produced”
The First Annual Intrapreneurship Benchmark
Survey on Commercializing Innovation
10

• 67% of the most innovative companies say
innovation is a competitive necessity regardless of
sector or geography (1)
• Leading innovators have grown 16% higher then the
least innovative (1)
• Innovation transformation underway (1)
• 91% of companies believe innovation is a strategic
priority (2)
The Importance of Innovation
A key driver of organic growth
for all companies (1)
(1) PWC Report “Breakthrough Innovation and Growth” - September 2013
(2) GE Report “Global Information Barometer” - January 2013
11

Intrapreneurs: Similarities
• Requires vision and strategy
• Uses leadership and strong execution to
succeed
• Needs internal funding
• Similar process of validate, plan, build,
launch and grow
• Opportunity driven
Intrapreneurs: Differences
• Usually Fearful
Fear of failure, career embarrassment,
confrontation or peer perception
• Stakeholders and Motives
Not just financial … NIH syndrome, lack of
alignment (on priorities) or lack of skills
• Navigates Existing Culture
May have little or no influence over culture
• Has Starting Points
Ability to leverage customers
Entrepreneurs: Similarities
• Requires vision and strategy
• Uses leadership and strong execution to
succeed
• Needs external funding
• Similar process of validate, plan, build,
launch and grow
• Opportunity driven
Entrepreneurs: Differences
• Usually Fearless
Simply start over or pivot mentality
• Stakeholder Motives
Almost exclusively financial (investors)
• Creates New Culture
• Starts from Blank Page
Must create customer base
Intrapreneur or Entrepreneur?
Mostly similar, the main differences are in
fears and stakeholder motivesWho REALLY has the most at stake?
12

Public Company Innovation Funding
“Continuing budget reductions are like
dying a painful death by a thousand cuts”
• The larger the company, the more acute the problem
• Quarter to quarter financial decisions (cutbacks) have
unintended downstream innovation consequences
• There is tension between organic innovation investment and
fiduciary shareholder budget responsibility where innovation
almost always loses
13

1. Innovation or Ideation Phase
• Differentiate, expand or otherwise extend through new invention(s) or
other forms of innovation
2. Commercialization Phase
• Commercialize, license or otherwise prepare the innovation for go-to-
market / market adoption
• Approaches will be driven by type of innovation (incremental,
enabling, breakthrough)
3. Market Adoption Phase
• Repeatable and scalable adoption / revenue growth from new
innovation
3 Phases of Innovation Success
1 2 3
14

• Incremental Innovation *
Logical extension, module or expansion to an existing offering that
extends the current value as well as leverages existing paths to
market
• Enabling Innovation *
Significant innovation that enables new value to be delivered … or
something new to be achieved but still leverages existing paths to
market
• Breakthrough Innovation **
Significant innovation that enables new value to be delivered… or
something new to be achieved but requires new paths to market
* Similar to Sustained Innovation
** Similar to Disruptive Innovation
Commercialization Approaches Will Vary
Tactics are innovation specific (experiments,
milestones, funding, process, agility, biz model)
15

• The Innovator’s Dilemma
• The Innovator’s Solution
both by Clayton Christensen
• Ten Types of Innovation: The Discipline of Building Breakthroughs
by Larry Keeley, Helen Walters, Ryan Pikkel, Brian Quinn
• The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators
by Jeff Dyer, Hal Gregersen, Clayton Christensen
• Business Model Generation
by Alexander Osterwalder and Yves Pigneur
Innovation Bookshelf
Presenters Opinion: The Most
Impactful Books on Innovation
16

• Everett Rogers: Demonstrated the application of diffusion theory to
technology adoption in 1962 book “Diffusion of Innovations”
• Geoffrey Moore: Expanded the model with “Crossing The Chasm” in 1991
… is now the de facto way to bring new technology solutions to market
• Moore’s book introduced a systematic method and tools to prevent new
products and solutions from ending up in the “chasm”
Proven Adoption Models Exist
Entrepreneurs and large enterprises
drive adoption that fuels growth
THROUGHOUT BUSINESS LIFE CYCLE
VEL BUSINESS ACUMEN
P r2
CRAIG RHINEHART
Marketing Solutions Spanning the Business Life Cycle
Rogers’s Original Model
NEUR DRIVING ECONOMIC GROWTH THROUGHOUT BUSINESS LIFE CYCLE
NG INFORMED INTUITION AND C-LEVEL BUSINESS ACUMEN
P r2
CRAIG RHINEHART
703.868.0120
hartprofile
art
rt.wordpress.com
hburn, VA 20147
EUR DRIVING ECONOMIC GROWTH THROUGHOUT BUSINESS LIFE CYCLE
NG INFORMED INTUITION AND C-LEVEL BUSINESS ACUMEN
P r2
CRAIG RHINEHART
03.868.0120
artprofile
rt
t.wordpress.com
burn, VA 20147
Moore’s “Chasm” Model
The “Chasm”
17

Innovation commercialization is not a
well understood process
• 68% of the corporate entrepreneurs we
surveyed described their approach to
innovation as unstructured and free-
flowing (1)
• 40% said that their companies came up
with lots of good ideas but couldn’t get
enough of them to the
commercialization stage (1)
• Research shows that structured and
formal processes for innovation are more
likely to result in viable new ideas (1)
• More important, the absence of a formal
process correlated with poor performance
in bringing new products and services to
market (1)
(1) Ernst & Young Report “Igniting
Innovation: How Hot Companies Fuel
Growth from Within” - 2010
Some Innovation Killers
18

• Even though 84% of executives say innovation is
extremely or very important to their companies’
growth strategy ... only 39% say their companies are
good at commercializing new products or services (1)
There is a Sizable Gap
Most organizations struggle to bring
organic innovation to market
(1) McKinsey & Company Report “Innovation and Commercialization” - 2010
19

Polling Question 1
• Innovation is important to the long-term health and/or
competitive advantage of an organization?
1. Strongly agree
2. Agree
3. Somewhat agree
4. Disagree
5. Strongly disagree
20

Importance of Innovation?
100%
88%
9%
3%
21

Polling Question 2
• How would you characterize your organizations ability to
commercialize its own innovation?
1. Exceptional
2. Above average
3. Average
4. Below average
5. Poor
22

Ability to Commercialize Innovation?
72%
20%
8% 8%
38%
26%
23

Mountains of Innovation – Top 10 Companies
1. IBM - 6,809 (patents)
2. Samsung - 4,675
3. Canon - 3,825
4. Sony - 3,098
5. Microsoft - 2,660
6. Panasonic - 2,601
7. Toshiba - 2,416
8. Hon Hai Precision Company - 2,279
9. Qualcomm - 2,103
10. LG Electronics - 1,947
Other innovative notables include
Apple, Google, Hewlett-Packard
2013 was the 21st consecutive year that IBM
topped the annual list with 6,809 patents
• In 2013, the United States
Patent and Trademark Office
(USPTO) granted more than
270,000 patents
• The USPTO awarded 76,850
patents to the top 50
companies alone.
http://www.huffingtonpost.com/2014/01/18/innovat
ive-companies_n_4624014.html24

• IBM Case Manager
IBM Software that adds case management functions and value to existing business
process management platform
http://www-03.ibm.com/software/products/en/casemana
• IBM Cúram Solution for Healthcare Reform
IBM Software that adds healthcare reform specific functions and value to existing social
services platform .. supported by multiple modules
http://www-03.ibm.com/software/products/en/healthcare-reform
• IBM Content Collector for Email
IBM Software that adds email integration, specific functions and value to existing
content collection engine … also extended by other “collectors”
http://www-03.ibm.com/software/products/en/contcollforemai
Incremental Innovation
25

• IBM Patient Similarity Analytics (Research Version)
• IBM Advanced Care Insights (Commercial Version)
Originally invented by IBM Research, now commercially available IBM
Software that enables a new type of advanced analysis of big data
http://www.research.ibm.com/healthcare/projects_patientsimilarity.shtml
http://www-03.ibm.com/software/products/en/advanced-care-insights
• IBM TAKMI (Research Version)
• IBM Content Analytics (Commercial Version)
Originally invented by IBM Research (a top 100 invention), now commercially
available IBM Software that analyzes and visualizes unstructured data ... core
natural language processing engine also used in IBM Watson
http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/takmi/
http://www-03.ibm.com/software/products/en/category/content-analytics
Enabling Innovation
26

• IBM DeepQA (Research and Jeopardy! Versions)
• IBM Watson (Commercial Version)
Originally invented by IBM Research, now commercially available IBM
Software that processes information more like a human than a computer … by
understanding natural language, generating hypotheses based on evidence
and learning as it
goeshttp://researcher.watson.ibm.com/researcher/view_group.php?id=2099
http://www.ibm.com/smarterplanet/us/en/ibmwatson/
Breakthrough Innovation
IBM DeepQA IBM Watson
20112007 2014
Jeopardy!
Challenge
QeepQA
Research
Begins
Ecosystem
Announced
Healthcare Solution
Announced
New Business
Unit Formed
Business Unit
Expanded
Commits
$1 Billion
27

Validation
Iteration
Early Adoption
5 Must Haves for Any Successful Project
1. Strong Executive Support / Sponsorship
2. The “Right” Innovation / Alignment
Supported by Strong Business Case
3. Experiments, Metrics and Milestones
4. Realistic / Flexible Plan and Timeline
5. Right Team with Persevering Leader
28

Polling Question 3
• Which tools do you use to assess or advance innovative ideas
within your organization?
1. SWOT Analysis
2. Business Modeling Tool (such as Business Model Canvas)
3. Business Case or ROI Analysis
4. We have an in-house tool
5. Other
29

Innovation Tools in Use?
30

World Famous Innovation Failures
Bad vision, poor execution and lack of
market validation all contributed to these
1. Ford Edsel (1957)
2. Sony Betamax (1979)
3. Colgate Kitchen Entrees (1982)
4. New Coke (1985)
5. Premier Smokeless Cigarettes (1988)
6. The Newton of Apple (1993)
7. Harley Davidson Perfume (1994)
8. BIC Women’s Underwear (1998)
9. The Zune of Microsoft (2006)
10. Cocaine Energy Drinks (2006)
http://www.linkedin.com/today/post/article/20130923083142-
206580-world-famous-innovation-failures
31

1. Initiate or help improve your Intrapreneurship program
2. Improve your individual intrapreneurship skills
3. Look for an intrapreneurial project to get involved with
Explore AIPMM Product Innovation Leadership certification
http://www.aipmm.com/html/certification/strategic-innovation.php
3 Things You Can Do To Make A Difference
32

• The First Annual Intrapreneurship Benchmark
https://www.surveymonkey.com/s/intrapreneurshipbenchmark
• Launched May 21, 2014
• Closes June 30, 2014
• Full Report Available in Q3
Take The Survey … Get The Results
Supporting Blog: Help Stop the Senseless
Killing of Important Innovation
http://wp.me/pKZJd-ez
33

• First job at 14 (paper boy) … First startup at 19
(photo retouching) … first acquisition at 22
(computer business)
• 30+ years as both intrapreneur and entrepreneur in
business strategy, innovation, products and
marketing
• Former Founder and CEO including several start-
ups and early stage companies
• Emphasis on enterprise software and systems
integration in ECM, analytics, cognitive computing,
photography, broadcast video, interactive learning
• Industry expertise includes healthcare, life sciences,
government, legal, education, insurance, media and
entertainment
• 8 career acquisitions (3 buy and 5 sell)
• 8 years at IBM … 4 years at FileNet
• Acquired twice by IBM (Tarian and FileNet)
About The Speaker
34
Mentors entrepreneurs - multiple programs:
• American Corporate Partners
• Accelerate DC (George Washington
University, Virginia Tech University, Johns
Hopkins University)
• George Mason University
• University of Maryland School of
Business

Q&A
35
Craig Rhinehart Presenter / Contact Information
Blog: http://CraigRhinehart.com
Twitter: @CraigRhinehart
Email: Craig@Rhinehart.com or craigrhinehart@us.ibm.com
https://www.surveymonkey.com/s/intrapre
neurshipbenchmark
Moderator: Hector Del Castillo, CPM, CPMM
Email: @hmdelcastillo

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