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Executive Master in International Postal Management Patrick Foley April, 2010.

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1 Executive Master in International Postal Management Patrick Foley April, 2010

2 Executive Master in International Postal Management Value Creation- Entrepreneurship Leadership Culture and Innovation Thursday 15 th April, 2010 Patrick Foley

3 Entrepreneurship and Intrapreneurship in-tra-pre-neur (In¹tre-pre-nur) n. 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 [intra(corporate) + (ENTRE)PRENEUR.]

4 The entrepreneurial process  Identifying an opportunity  Defining a business concept  Assessing resource requirements  Acquiring those resources  Implementing and managing the concept  Harvesting the concept or venture

5 Dispelling the myths and sidestepping the folklore  Entrepreneurs are born, not made  Entrepreneurship is about invention  Entrepreneur profile  All you need is luck to be an entrepreneur  Entrepreneurs are extreme risk takers (gamblers)  Entrepreneurs are academic and social misfits  All entrepreneurs need is money  Ignorance is bliss for entrepreneurs  Entrepreneurship is unstructured and chaotic

6 Common traits and characteristics associated with the entrepreneurial individual Drive to achieve Internal locus of control Calculated risk taking Tolerance of ambiguity Commitment/perseverance/determination Independence Self-confidence and optimism Tolerance for failure Persistent problem solving Opportunity orientation Integrity and reliability High energy level Resourcefulness Creativity and innovativeness Vision Team building

7 Behaviour that defines an entrepreneurial manager  Efficiently gets proposed actions through red tape and into practice  Displays enthusiasm for acquiring skills  Quickly changes course of action when results are not being achieved  Encourages others to take the initiative for their own ideas  Inspires others to think about their work in new and stimulating ways  Devotes time to helping others find ways to improve products and services  Goes to bat for good ideas of others  Boldly moves ahead with a promising new approach when others might be more cautious  Vividly describes how things could be in the future and what is needed to get there  Gets people to rally together to meet a challenge  Creates an environment where people get excited about making improvements

8 Characteristics of the entrepreneurial mindset  They passionately seek new opportunities  They pursue opportunities with enormous discipline  They pursue only the very best opportunities and avoid exhausting themselves and their organisations by chasing after every option  They focus on execution – specifically, adaptive execution  They engage the energies of everyone in their domain

9 Characteristics of traditional strategy and entrepreneurial strategy Traditional StrategiesEntrepreneurial Strategies Security and job preservationRisk-taking and job creation Learn one skillLifelong learning Stability, tradition, consistency, robustnessSpeed, change, adaptability, agility Top-down command360 degrees integration, flat structure Capital is equipmentCapital is people’s know-how RegulationDeregulation Segregation and compartmentalizationIntegration and Synergy Transaction and controlTransformation and empowerment Status is ascribedStatus is achieved Scarcity mentality, zero-sum gameAbundance mentality, win-win paradigm

10 Obstacles and effects of traditional practices Traditional management practicesAdverse effects Enforce standard procedures to avoid mistakesInnovative solutions blocked, funds misspent Manage resources for efficiency and ROICompetitive lead lost, low market penetration Control against planFacts ignored that should replace assumptions Plan long termNonviable goals locked in, high failure costs Manage functionallyEntrepreneur failure and/or venture failure Avoid moves that risk the base businessMissed opportunities Protect the base business at all costsVenturing dumped when base business threatened Judge new steps from prior experienceWrong decisions about competition and markets Compensate uniformityLow motivation and inefficient operations Promote compatible individualsLoss of innovators

11 What is a Product Concept?  A concept includes: –a specific product form (the attributes) –a specific technology (the source of the form) –a specific benefit for a particular usage situation

12 Customer Value Product Benefits Service Benefits Brand Benefits Price Customer Value Costs Profit The customer must perceive a value that exceeds the price. The seller must charge a price that exceeds costs.

13 Forces that Shape Differences in Consumer Needs Customer Needs Demographic Forces Lifestyle Forces Usage Behaviors Age Income Marital Status Education Occupation Attitudes Values Activities Interests Political View Quantity Time of Use Personal Social Frequency

14 Empathic Design Process 1. Describe the process of how you purchase, use, and dispose of the product. 2. Re-describe the process of how you would like to purchase, use, and dispose of the product.  This puts focus on the process of using the product, not just the product.

15 ”Staple Yourself to an Order”  Order planning:  Order evaluation:  Order placement:  Order delivery:  Order payment:  Product usage:  Product problems:  Returns and claims:

16 Where can we create value, and achieve economic benefits? Price Paid Maintenance Costs Acquisition Costs Usage Costs Ownership Costs Disposal Costs

17 Translating the “Voice”-of-the-Customer Customer Verbatims Interpreted Needs Observations Product Concepts Product Specifications Scenario Planning Or Market Driving Forecasting

18 Empathic Design... Customer Verbatims Interpreted Needs Observations Product Concepts Product Specifications Scenario Planning Or Market Driving Forecasting

19 Translating Observations into Interpreted Needs (Empathic Design)  Observation  Capture “data” - use video or still pictures, don’t write  Show “data” to people who didn’t observe first- hand and discuss observations  Brainstorm for solutions

20 Depth Interviews... Customer Verbatims Interpreted Needs Observations Product Concepts Product Specifications Scenario Planning Or Market Driving Forecasting

21 Translating Verbatim Statements into Interpreted Needs  Identify the benefit and not the function (what the product does, not how it should/must do it). “I want a 1/4” hole, not a 1/4” drill bit.”  If possible, avoid words like “must” and “should.”

22 Designing a Kitchen Tool Customer CommentInterpreted Needs “It hurts my hand.” “The tool is comfortable.” “It only does one thing.” “The tool can peel, gouge, cut, etc.” “It is not very attractive.” “The tool looks stylish.”

23 Designing a Coffee-Making Machine “I would like it to remind me of an English butler.” ”I hate it when it drips if I pull out the pot or the filter.” “I don’t like having the cord stretched all over the counter.” “I just want a good tasting cup of Joe.” The product is elegant and unassuming, with clean lines. The product keeps itself and the area around it clean. The product has good cord management. The product makes good coffee. The product heats and keeps water at the appropriate temperature. Verbatim NeedsInterpreted Needs

24 Structuring the Interpreted Needs  Categorize the interpreted needs into a smaller number of categories.  What “primary interpreted needs” labels should we attach to these categories?

25 Prioritizing Interpreted Needs  Kano Classification (one approach) –L = Linear Satisfiers (“The more the merrier.”) –N = Neutral/Indifferent (“No big deal.”) –M = Must Haves (“I won’t buy without!”) –D = Delighters (“What an unexpected treat!”)

26 Kano’s Model of (Non-Linear) Customer Satisfaction Customer Satisfied Customer Dissatisfied See (1) Matzler, et al.., 1996, Journal of Product & Brand Mgmt (2) Matzler and Hinterhuber, 1998, Technovation (3) Center for Quality MgmtCenter for Quality Mgmt Must Have (M) Delighter (D) Linear Satisfier (L) Requirement Fulfilled Requirement Not Fulfilled Indifferent (I)

27 Relative Performance Relative price Relative Performance 200 0 0 100 150 50 100150 Panasonic Motorola Nokia Above average performance, below average price.

28 Differentiation - Symbolics/brand  A strong brand enhances evaluations of product quality (+/-), maintains a high level of product awareness, and provides a consistent image or brand personality.  It simplifies the buying (decision) process by providing recognition of a given value.

29 Business versus Commercialisation Plans AreaCommercialisation PlanBusiness Plan Scope Project or technology specific Usually company/business wide but maybe high-tech based Value Chain Early-stage emphasis More Middle/late stage (post proof of concept) Intention Evaluate commercial viability Organization operational plan, business case evaluation Focus Commercialisation options and pathways Business operations and tactics & Capital Raising Financial Intensity Broad financial modeling e.g. NPV Valuation of technology (Top down) Detailed financial analysis e.g. P&L, Balance Sheet etc (Bottom up) Market Research Early stage, market/industry overview Detailed market research, with market segmentation

30 What is Innovation and Commercialisation?  Innovation is the process of taking a creative idea and turning it into a useful product, service or method of operation.  Commercialisation definition (Macquarie Dictionary)  commercialise to make commercial in character, methods or spirit; make a matter of profit  commercial capable of being sold in great numbers; setting possible financial return above artistic considerations  Process of managing the transfer of research outcomes to broad market application

31 WHY Commercialise?  Satisfaction of bringing benefits to society  National economic, social and political imperatives  Expanded career options + enhanced ‘employability’  ‘No strings’ funding for further R&D effort  Break free of the competitive grants cycle  Professional development and peer recognition  Relative autonomy

32 Commercialisation defined  Commercialisation –is the process of turning an idea or invention into a useful product or service. –Some commentators use commercialisation in a narrower sense to mean turning an idea or invention into a marketable product or service that will return a profit. –Commercialisation is a component of the broader innovation process.

33 Technology Market The innovation life cycle focuses on the development of science and technologies through research, prototype and production. Innovation does not necessarily generate a commercial product. The commercialization life cycle focuses on the needs of existing and potential customers. Commercialization identifies target market segments, value propositions, and functional relevance from the customer’s point of view. Innovation is Technology-centric Innovation is Technology-centric Commercialization is Market-centric Commercialization is Market-centric

34 Relevance Relationships Funding Technology Market Collaborations Market Intelligence Market Access Business Skills Interoperability Success depends on Market Relevance Success depends on Market Relevance Success depends on Technology Relevance Success depends on Technology Relevance Funding

35 Technology Market To transform a “technology” to market success, requires tight integration of the innovation-commercialization functions to overcome the “Functionality Barrier”. “Technology Commercialization” is a misnomer. The Functionality Barrier is overcome when >> technologies are transformed into applications, >> applications into products and services, and >> product and services to target market segments. To transform a “technology” to market success, requires tight integration of the innovation-commercialization functions to overcome the “Functionality Barrier”. “Technology Commercialization” is a misnomer. The Functionality Barrier is overcome when >> technologies are transformed into applications, >> applications into products and services, and >> product and services to target market segments. The Functionality Barrier

36 Integration & Collaboration  To be successful, both the innovation and the commercialization processes need to be considered and balanced. –Supporting one at the expense of the other will minimize the economic return on investment and its overall impact.  Incremental value will be created when both cycles are integrated and supported. “Strong innovative companies move beyond the simple dichotomy of ‘market pull’ versus ‘technology push’ to embrace both sides of the equation.” Conference Board of Canada “Strong innovative companies move beyond the simple dichotomy of ‘market pull’ versus ‘technology push’ to embrace both sides of the equation.” Conference Board of Canada

37 The Pitch  The Sound Byte: –what do you do? “I have a unique solution that will solve a big problem that exists today”. Describe the business in 8 words or less.  The Elevator Pitch: –slightly longer 2-3 minutes. Financing requirements and also action points for follow-up by VC.  The Extended Pitch: –10-20 minutes. Key points including Product/Technology, Management Team, Business Model, Financing requirements and also action points for follow-up by VC.

38 Elevator Speech: Putting it all together  Creating your own Elevator Speech  Capture the essence of your business plan in a 30-second, 2-sentence elevator speech to the person who you want to fund your idea –The methodology presented here is based on Geoffrey Moore’s paradigm presented in Crossing the Chasm

39 Software Developer - Original  Knosis has the only available software package that captures a proven methodology for taking an effective idea and assembling it. Imagine you run a large management consulting firm and 50,000 consultants and 15 million hours a year assembling, of course, up over a million reports and presentations. What price will you pay for inefficient report or presentation practices? How many clients will you lose because presentations are not…compelling?

40 Software Developer – Original (cont.)  The number one cause of ineffective (presentations) …is the failure to organize ideas for the way people think. The number one solution is the methodology that has become an industry standard in management consulting. Knosis has completed a packaged software that streamlines (the process)…Word of our product has sparked high-level interest in seven global companies. We’re seeking $500,000 to accelerate…our efforts.

41 Typical Elevator Speech Problems  All about “me.”  Don’t clearly identify the benefits or the beneficiary.  Don’t identify the problem being solved or why the problem is important.  Don’t connect the technology or business with a readily understood industry.  Don’t discriminate the company from the competition.  Rarely identify the competition or state-of-the- art.

42 The “Elevator Speech” Process For: List target customers. Group them and ultimately define THE customer. Who: Define the need or opportunity. That is, what critical issue does the customer face? The: Name the product or service or concept. Is a: Place the product, service, or concept into a generally understood category.

43 The “Elevator Speech” Process That: List the benefits – not the features – of the product, service, or concept provides to the customer. Group or prioritize the benefits to identify the single benefit that is the most compelling reason for the customer to buy the product, service, or concept. To the maximum extent possible, the benefit should be quantified. Unlike:List the competitors and competitive alternatives – i.e. the state of the art. Our:Develop a statement of the primary differentiation of the product, service, or concept. The differentiation is the single most important thing that sets your product, service, or concept apart from the competition or state of the art.

44 An “Elevator Speech” Example - Electronics Processing For: electronics industry manufacturers Who: annually experience over $40 billion in loses due to static discharge, The: PolyTronics’ conductive plastic Is an: advanced material That: inexpensively and completely eliminates damage from static electricity. Unlike:currently used, expensive static discharge equipment Our:product is an integral part of the electronics assembly that continually drains static charge from the product assembly.

45 Electronics Processing - Rewrite  For electronics industry manufacturers who annually experience over $40 billion in loses due to static discharge, the PolyTronics conductive plastic is an advanced material that inexpensively and completely eliminates damage from static electricity. Unlike currently used, expensive static discharge equipment, our product is an integral part of the assembly that continually drains static charge from the product assembly.

46 Electronics Processing - Alternative  Electronics industry manufacturers annually experience over $40 billion in loses due to static discharge. PolyTronics has developed a conductive plastic that is a state of the art material that inexpensively and completely eliminates damage from static electricity. Currently used industry methods require expensive static discharge equipment that only work while the piece is connected. Our product, on the other hand, is an integral part of the assembly that continually drains static charge from the product assembly.

47 Software Developer - Rewrite  For large system engineering consulting firms who need to effectively and efficiently assemble coherent presentations of complex ideas from many collaborating partners, the Knosis product is a knowledge management package that incorporates the industry-standard methodology in an easy to use software tool. Unlike the manual process, our product can manage input from thousands of consultants and develop a final presentation of the idea with a few keystrokes.

48 The Pear Label  For consumers who now struggle to determine the ripeness of pears and other types of fruit in the supermarket, the non-toxic Fruit-Ripe™ label is a simple indicator on every piece of fruit that changes color to show consumers when the fruit is ready to eat. Unlike current ripeness testing by consumers—the often unreliable squeeze or sniff test—our Fruit-Ripe™ label ensures consumers are able to select fruit at its peak of ripeness while retailers lose less fruit to bruising and spoilage, enabling growers to sell more fruit to a satisfied market. The potential worldwide market could reach many billions of units per year.


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