Latest / The Innovation Show / Alex Osterwalder — Which Projects to Fund and Which to Kill

Transcript

Alex Osterwalder — Which Projects to Fund and Which to Kill · The Innovation Show

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how do I know if I should invest in a project or if I should kill a project?
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Like what, how, how risky is that still?
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Those are things that are technical that you can easily make the playbook for
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What you really wanna do is break this down and have evidence
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for the different aspects.
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So evidence here for desirability.
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Do I have evidence one, two, three, four, five for desirability?
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Then we go to feasibility.
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Do I have evidence level one, two, three, four, five?
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And same for viability.
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So it's almost that we create a scorecard for each idea.
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Now, to make it concrete, when a team presents, and I talk, talked to you
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about the Honeywell Growth Symposium, each team is not just going to present
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the idea, they're gonna present their scorecard of evidence, and it's the
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scorecard of evidence that's gonna give the leadership confidence.
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So the idea per se, you can't judge if it's good or bad.
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You can only judge, do we have evidence that shows it's an
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idea that is worth investing in?
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And at, you know, you do this gradually.
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So at the beginning, you might have a zero everywhere.
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There's a nursing home and rehabilitation center in Rhode Island
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called Steere House, and back in 2005, the staff adopted six cats.
2:05
One of them was Oscar, and Oscar was not the friendly kind.
2:09
He kept to himself.
2:10
And he hissed at you if you annoyed him.
2:13
Then the staff noticed something.
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Oscar would pick a patient, jump up on the bed, stamp out a place beside
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them, and curl up, and within a few hours, that patient would die.
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What I find most interesting is that he could tell the difference
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between a bad turn and the end.
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One family described their mother having several false alarms, and each time Oscar
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came in, had a look, and left again.
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On the last day, he paced outside the room for hours.
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When nobody let him in, he went into the room next door and scratched
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at the adjoining wall until somebody understood what he wanted.
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There's a science behind it.
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It's called necromones, biochemicals released by dying
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cells akin to pheromones.
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And what the staff did with this information is what's most interesting.
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They didn't argue with the cat.
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They rang the family so people had a chance to say goodbye.
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Last week, Antonio Nieto-Rodriguez talked to us about killing projects.
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Today, we're joined by the man who decides which projects get
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the money, and you'll notice he doesn't much like the word killing.
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He's the creator of the Business Model Canvas, author of The Invincible
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Company: Testing Business Ideas Value Proposition Design, and CEO of
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Strategyzer, where he has moved the business from books to playbooks, which
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is something a lot of you have been asking for on the Innovation Show.
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He's a great friend of mine.
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He's a great friend of the show.
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Alexander Osterwalder, welcome back, sir
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thanks for having me.
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Great to be back
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Always a pleasure, man.
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Your shows always are like rocket fuel for the Innovation Show, so it's
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always a pleasure to have you, man.
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Firstly, before we get stuck into how to kill projects, and you are the
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Oscar, give you the Oscars of killing projects, what have you been up to?
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I know the business has shifted a little bit.
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You've been traveling all over the world giving keynotes, but more
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so giving workshops and teaching companies how to actually do this work
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I'm passionate about getting people to work differently the right
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way, , to make projects work.
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But everybody's frustrated, in particular around growth projects, right?
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But it goes much further.
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You know, new value propositions, strategy, et cetera.
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So one of the things that, you know, I was asking myself is why?
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Why can't we make these things work?
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Because you have all these brilliant people.
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Um, yeah, our organizations are complex, but, like, we know the tools now, we know
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the techniques, we know the processes.
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So what are we doing wrong?
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And what I started to realize is that, well, we used to do e-learning, we
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used to do workshops, we used to do training, we do coaching, you know,
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consulting, all of it, but somehow it never really took the r- the right way.
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So what we started to do is put that all together in what we call playbooks.
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So instead of trying to teach content, you know, do consulting, which can get very
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expensive, we said, "Well, what if we took everything we know, you know, that works,
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and we move from books to playbooks?" You know, the whole idea of books is around
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content and coaching and consulting.
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Playbooks is you have an objective, what's the playbook to get there?
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Want a great value proposition.
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How do I do that?
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Oh, I want a great value proposition with AI.
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Well, how do I do that?
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So it's just a step-by-step approach.
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So we kind of figured out a really good way of getting teams to work
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differently to get to results faster with all the tools and
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methods that are out there, right?
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There are a lot of great thinkers with a lot of great content.
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So why aren't organizations able to adopt them?
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So it's not just about Strategyzer tools and content.
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It's really, like, let's make… You know, let's turn all of this stuff into
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playbooks that companies will actually adopt so that we work in a better way.
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So that's been my passion over the last, you know, two years or so, and
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I think we got something that works for, for, for many different domains.
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I know you can't talk about a lot of the brilliant companies you work with
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and the successes they've had, and the ability to kill projects as well.
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That's gonna be the focus of this shorter episode.
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So one of the things many people who listen to the Innovation
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Show, many viewers on YouTube have asked for, is more of this type of
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content, more of playbook style.
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So thank you for doing that for us.
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You're gonna take us through today how to kill projects, and actually really how to
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set them up for success in the first place
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and actually there's some we can talk about.
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So when I say playbooks, we actually have two categories.
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We created a playbook library where anybody can a- get access to the
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playbooks we put out there, and hopefully we'll get some thinkers
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to put their playbooks in there.
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That's publicly accessible for anybody, so small teams, startup entrepreneurs, SMEs.
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But then we also do these custom playbooks, and the one I can
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talk about, we've done many of these, is for Honeywell.
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So we're running their growth symposiums around the world, and the idea is exactly
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what we're gonna talk about today.
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Which projects do we invest in, and which project, projects
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should we change or retire?
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So I'll, I'll, I'll move away from the idea of killing per se, and
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ultimately the goal is to invest in those few that can actually work, right?
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So you get a real funnel, not a tunnel.
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So with, the growth symposium, I'm just back from Shanghai two weeks ago.
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We do that in, in, Shanghai, we do it in India, we do it in
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Europe, and we do it in the US.
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And the senior leadership team is always there to invest in the projects.
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So the teams get to show these projects in a very specific way, and I'll, I'll
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walk you a little bit through that.
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So I'm, I'm happy to reveal those secrets because they should be
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accessible to everybody, right?
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I'll link to all those resources that are available on the Strategyzer
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website as well, but Alex is gonna bring us through a few slides.
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For those just listening to us, this is probably gonna be more difficult
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to grasp than a usual episode.
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But Alex said he'd do his best to describe this for you and let
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you know what's on the screen.
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Over to you, my man
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I'll use words to describe the visuals so it's easier when you see the
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visuals, but, you know, let's also make the slides accessible, right?
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'Cause w- my goal is really to get this stuff to spread.
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So, you know, a couple years ago, we worked with a consortium of businesses.
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There was, Bosch, there was, Cargill, there was Nestlé.
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We came together to ask, "How can we actually score growth projects
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to know which ones to invest in?" So that was the initial goal,
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like, how can we create metrics?
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Because if you can't measure it, well, you can't manage it.
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It's, it's very simple.
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So sometimes I'm a bit, you know, surprised how in the innovation and
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growth world, we don't measure that much, and we, you know, dole out
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money for, you know, things that people didn't show you the metrics.
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And when I say metrics, it's not an upfront business case.
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I'll show you what I'm talking about.
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I'm talking about measuring the evidence that the business case could work.
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So how should you do this?
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So just quickly, fundamentals.
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I'll go very quick.
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When you start with an opportunity, you can come up with a business
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case, but you know what?
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It's a fantasy.
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So what you really need to do is search for the right Business
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Model and Value Propositions.
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That's what we need to prove, okay?
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So we can actually measure how close are we to success, and then we kn-
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when we're close, we start to scale.
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So it's this whole thing, right?
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We go from an idea opportunity to the real business.
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Now, there are two big tasks there.
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One, companies are really good at designing the business logic.
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So with these tools that you might know, like Business Model Canvas, Value
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Proposition Canvas- Companies make business cases, but here's the problem.
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They invest in a business case that is a pure fantasy.
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What they should do is admit, "We do not know if that's gonna work,
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so we actually need to test and validate," you know, again and again
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and again, and we kinda create this discipline that is evidence-based.
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So we design, we test, we design, we test, and that's a gradual process.
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Okay?
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So that's the process.
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So what do we need to test, and what do we need to measure?
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So first thing, pretty straightforward.
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Well, let's test if those customer needs actually exist.
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So sounds trivial, but instead of going to talk to customers or run other
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experiments, we're gonna focus, you know, three weeks on a business case.
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That's analysis paralysis.
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So we tend to overthink and under-experiment.
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So what you wanna do is you wanna think for maybe a, a half a day, and
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then you go and talk to customers.
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Do they actually have those needs?
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The second thing you immediately wanna do is willingness to pay.
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Do they have a budget?
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Have they purchased things like that before?
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So you're not gonna ask, "What would you pay?" But you start
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to investigate, will they pay?
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And you can do that either with interviews or more sophisticated experiments.
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Then you start to look at the benefits.
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Now you look at the solution, and all the way up to here, you don't,
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you don't need to build anything.
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So people say, "Yeah, we build MVPs," minimal viable product.
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Well, the problem is engineers love to build, so they build too fast.
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The first thing you wanna do, in particular in the age of AI,
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is first test and validate the needs and the willingness to pay.
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Because we can build so fast, we tend to build first, and then we're gonna
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build the, the wrong thing for 100 times.
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So it's better to start actually with the needs.
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Sounds trivial, not done.
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Right?
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Common sense, not common practice.
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Then we go to, um, go to market, and then we start to really look at feasibility.
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So it's a process.
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So you put this together.
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We test desirability.
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We show the evidence.
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That's what we can measure.
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We can measure the evidence that there is desirability.
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We can measure the evidence that there's feasibility.
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That's the easiest one 'cause all the engineers are gonna get
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excited about feasibility, so this one we don't need to worry about.
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Companies do this well.
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But then viability.
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We need to measure the evidence that customers will pay, and sometimes
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companies tell me, "Yeah, Alex, we actually measure viability."
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"What do you do?" "We do spreadsheets." Spreadsheets are a fantasy made explicit.
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They're not a metric.
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What you can do is measure the evidence that supports the spreadsheet.
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So you can say, "Hey, this is the customer segment.
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We talked to 10.
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We talked to 1,000," or, "We surveyed 1,000.
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You know, like 50% actually already spent on this type of solution."
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That's what you call measuring kinda the evidence.
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Okay.
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So now I showed you the principle.
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Let's look at the metrics.
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So when we worked with this consortium of companies, because we wanted to
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make it applied, we said, "Well, how could we measure and what do
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we measure so that we can apply it from B2C to B2B to government?"
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We said, "Well, what we can measure is evidence." First rule
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is business plans and high-level market research is not evidence.
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It's a hint that there's a market there, but just because some big consulting
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firm or your internal analysis said there's a big market there, doesn't
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mean they're gonna buy from you.
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It doesn't mean they have the need you're gonna address.
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So that's not evidence yet.
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So what is evidence?
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Hey, we talked to, let's say, a couple of hundred, and we get
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feedback from them, or we run… I'll show you some other experiments.
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That's first light evidence.
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We give that a score of one, and then we can have higher scores if we actually
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go further, and they may be pre-purchase or other experiments where it's
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really proof that it's the real world.
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Okay, so we score the evidence from one to five.
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So let's go through this.
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The first two levels is what people say.
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So if I do an interview, so I'll make this concrete, okay?
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So if I go and talk to people, but I don't really have the solution yet,
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I just do an interview, it's great.
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It's a good start.
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It's low level.
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It's level one.
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People, you know, in B2B, they call this voice of customer.
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You have market research firms.
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That's great.
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That's level one.
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But what you then wanna do is, what if you showed them a data sheet, a storyboard
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that made the solution concrete?
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Now they react to a real thing.
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That's already level two, but it's still just what they say.
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"Oh, I love that solution." "Okay, great." So, so they just say, and then
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you might ask, "Would you buy this?" "Oh, yeah, yeah, yeah." But they say
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that, doesn't mean they're gonna do it.
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So what you wanna do now is go further than just interviews, which
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most companies stop there, and they will invest a million, a hundred
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million sometimes based on interviews.
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Not good enough.
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So then you say, "Well, could we do a stronger experiment, slightly
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stronger, where there's a bit more skin in the game beyond saying?" So the
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typical kinda thing is a landing page.
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You put up a landing page with the storyboard of the solution, and you get
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people to sign up maybe for a sales call.
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Well, you know what?
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That's already more than them just saying because they came to
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you, they signed up for the sales call or for an email or whatever.
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There's a small call to action.
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That's stronger evidence than saying, but it's still very weak.
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Oh, what could we do?
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Could we do something stronger?
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Well, if we're in B2B, what if…
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Let me get out of the way What if we got them to sign a letter of intent?
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What if we got the CEO of the potential customer to join a co-creation workshop
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where he flies over, the CEO flies over, and we actually work together?
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That's a stronger commitment.
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Will they buy?
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Not sure, but the fact that the CEO of a client shows up
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is already a bigger commitment.
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Oh, could we do something that's a five?
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A whole series of experiments that, you know, either it can be a down
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payment, it can be a real payment, it could be some things where you just
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go and, you know, watch them in their plant, how they're actually working.
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But the point is that we have levels of evidence, okay?
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So we know we need to go beyond the interviews.
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Now, here's where it gets interesting.
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If you just stick to this, people will say, "Oh, they're gonna try to
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test the whole idea." But remember, I showed you, there are pieces to test.
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You test the needs, you test willingness to pay, you test the solution.
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So what you really wanna do is break this down and have evidence
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for the different aspects.
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So evidence here for desirability.
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Do I have evidence one, two, three, four, five for desirability?
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Then we go to feasibility.
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Do I have evidence level one, two, three, four, five?
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And same for viability.
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So it's almost that we create a scorecard for each idea.
16:39
Now, to make it concrete, when a team presents, and I talk, talked to you
16:44
about the Honeywell Growth Symposium, each team is not just going to present
16:49
the idea, they're gonna present their scorecard of evidence, and it's the
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scorecard of evidence that's gonna give the leadership confidence.
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So the idea per se, you can't judge if it's good or bad.
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You can only judge, do we have evidence that shows it's an
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idea that is worth investing in?
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And at, you know, you do this gradually.
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So at the beginning, you might have a zero everywhere.
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That's okay Last, you know, the, the, the thing I show sometimes to
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make it concrete, if you compare LEGO Friends to LEGO Movies, when
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LEGO started to invest in LEGO Movies, all of it was actually zero.
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They don't-- didn't know anything.
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They didn't know how to make a movie.
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They didn't know if the brand would work.
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So they start from scratch.
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When you take LEGO, uh, Friends, which were play box for girls, feasibility,
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they had level five from the start.
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They didn't need to run experiments because they had the supply chain,
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so were already starting at a five.
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So you can see, you can already start to compare ideas, which one
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is riskier, which one is less risky.
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But the point here is, is that we don't stick to abstract stuff or our opinions,
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we stick to more objective evidence.
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So that is the theory or the technical part where we get very geeky around
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these things because we know that we need to get to the metrics.
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It's not a feeling.
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Innovation is actually a process, growth project, and then we start
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to build playbooks around it.
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So this is a little bit of a very concrete content that we kinda give
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away, we put them out there on slides, is the playbooks that we then use to
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try to get people to the next level to actually doing this in an organization.
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Man, I, I have PTSD now.
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So it reminded me of my first career, which was in a media company where
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I was head of transformation, or digital transformation, and I was
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constantly coming up with ideas, and the CFO would always kill them
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by asking me to do a business plan.
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And of course, I'd make it up, finger in the air, no idea
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even how to do any of this.
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And back then, I told you, that's when I discovered your work
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on the Business Model Canvas.
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I tried that, but this is Business Model Canvas evolved and on steroids in a way.
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But I just wanted it to go, okay, so so you're in any company.
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Now, I know it might feel different if you're in a services
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company or a business co- a, a product, physical product company.
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you're somebody in la- sector 7G and you have an idea, what usually happens is
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you try and get somebody with authority to listen to you, or you might be lucky
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or a bit more evolved where you might have one of those spark boxes where
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you can come up and suggest an idea.
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But usually they don't go anywhere.
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So take us through somebody there, somebody starting there.
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'Cause y- you, you worked with these people.
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You've helped these people.
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You've actually helped people get all the way through the gates, but
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also decide to actually just kill the project in the first place
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Yeah.
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So there's a bit of a, a, a tricky one there, right?
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Because if you're in, what, what you said, , sector G7 wherever you are
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that's where, Homer Simpson's, office was Sector
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Okay.
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Okay, got it.
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But so the problem is w- you're actually starting from a difficult point because
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if the company doesn't already understand, you evaluate and invest differently in
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growth projects for a future that we don't know compared to execution projects.
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If the leaders don't know, you're already a little bit on a lost kinda track, right?
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Because they're gonna think in the exploit world.
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So the first tactic I'd say is try to get them to understand that in an explore
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world, we don't know if it's gonna work.
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We have to be honest.
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We do not know.
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And then you show them, you know, the best thing we can do is not a spreadsheet,
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because a spreadsheet is a fantasy.
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What I did is I started to collect evidence.
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So here's this process where we get more and more evidence, and based
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on the evidence, we should invest.
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So you do need to get them into a frame that how is working in
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explore different from exploit?
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Because what you need to understand-- I do this with leaders all the time,
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but it's the same if you're not the leader making the decisions.
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You need to realize in ninety percent of the companies,
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everybody's in an exploit mindset.
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So if you don't take them out of the exploit mindset, they're gonna evaluate
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everything with that lens, right?
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They have the exploit glasses on, so they're gonna want a business case.
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They're going to want, you know, the spreadsheet, you know,
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for the next hundred years.
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So what you wanna do is say, "Look, this is not about a business case.
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I have one.
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I made this, and it looks great.
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But what's more important is I'm now on track to find the evidence that
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this business case could work." So you need to bring them out of the exploit
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mindset to show how exploration works.
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That's the tough part.
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So sometimes if you're in that little box, you can't get leaders to think like that.
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But some actually naturally are inclined to think like that, but nobody's
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ever told them to think like that.
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I know a ton of CEOs.
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Like, I get to work with a ton of leadership teams.
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I just start with, "Here's how explore works.
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Here's how exploit works." And then they immediately realize, "That's why
22:19
none of our projects work, because we try to pick the right idea.
22:22
We had a great business case and, you know, then we poured, you know,
22:26
ten million or a hundred million on the project." That doesn't work.
22:29
That works in the exploit world.
22:31
So that's the starting point.
22:32
That's the unfortunate part when you're at the bottom of the pyramid
22:36
I love the line that your mentor and friend of the show, Steve
22:40
Blank, has, "Exploitation pays your salary, exploration pays your
22:44
pension." I absolutely love that.
22:46
It's at the start of
22:47
Lead and Disrupt, Tushman and O'Reilly's
22:49
book.
22:50
But that, that, that is a huge thing.
22:53
The last thing before we go on to e- evolve the idea a little bit further
22:58
is the, the, the lessons there.
23:01
So you talked about earlier on the, the move from books to playbooks.
23:05
One of the biggest and saddest things, I think, particularly in the age of AI,
23:09
is that we didn't read enough anyway.
23:12
We didn't evolve our lenses anyway to add new lenses when the world changes,
23:16
so we're stuck with the lenses we have.
23:18
The business schools are teaching models.
23:21
Now, it's getting better.
23:22
I know, for example, your work, for example, is taught in Trinity College,
23:25
where, business school, where I am, Now, it's getting better, but there's
23:30
still a lot of leaders in companies who have been taught, if at all,
23:35
for the way of exploitation, and the world has changed dramatically, and
23:40
the metrics they use to measure that are so, so different than the metrics
23:46
needed for exploration or new ideas.
23:49
Maybe just a word on that, because that, for example, is a huge thing.
23:53
So you talked about lenses there, but the lenses plus the metrics, of course
23:57
many ideas don't make it through the gates because they're measured so badly
24:02
Yes.
24:03
But so, so couple of things there.
24:05
The biggest challenge is indeed what you say is that established
24:09
companies are trimmed to execute.
24:11
And you know what?
24:13
That's actually a good thing because they have to.
24:15
And if you're a publicly listed company, well, your first thing
24:18
is you need to really fight for the survival of that company, so
24:21
you can never neglect execution.
24:24
So that's why when people say, "Oh, everybody needs to be an
24:26
innovator," I say, "Absolutely not.
24:28
You need to run the company." And, and that is a big task, right?
24:31
It's like the execution pays the salaries.
24:34
So what we need to have now is an education for leaders that shows
24:40
them they need a dual mindset.
24:42
They need to actually think, explore, and exploit.
24:46
The 19th century, you know, CEO, if I may go all the way back, that was an exploit
24:51
CEO because better processes to run the company was the differentiator, right?
24:55
Today, the real differentiator is the ability to constantly transform.
25:01
So if you look at the companies that are at the top of the pyramid today, the
25:05
best performing companies, it's those that constantly reinvent themselves.
25:10
So they're world-class at running the business, and they're
25:12
world-class at reinventing.
25:14
So, you know, the usual suspect is an Amazon.
25:17
Um, but now if the AI… If you look at the AI companies,
25:21
which ones are surviving?
25:22
Those that can reinvent themselves faster than the others.
25:25
So that is a key, and it's not fully taught yet But the worst thing is that
25:31
today we have, you know, heads of strategy and growth or heads of innovation that
25:37
have never done it before and that have not gone through that education.
25:40
So sometimes CEOs or leadership teams put people in place who
25:46
they're good with technology.
25:47
Well, guess what?
25:48
That does not equip you with being a growth leader.
25:52
Growth is something that has processes and ways of doing, and the good
25:57
news is we now know how to do it.
26:00
So A, let's educate ourselves on how it's being done, and let's
26:05
peop-p- put people in place who've done it once or twice, right?
26:08
So I still see major corporations, I will not name names, but they
26:13
put people in place who don't know.
26:16
And then they, you know, they call us and they say, "Alex, can you tell us?"
26:18
So we tell them, and then instead of, you know, working with us so we can help them,
26:23
they go and do it themselves, and then they realize, "Oh, shoot, didn't work,"
26:26
and then they come back to us because, you know, we've done this 100 times.
26:30
We're not smarter.
26:31
We've just done it so many times that we're able to formulate how to do it
26:36
from the leadership level, that's what we call governance, all the way down to
26:40
the team level, which is the process.
26:43
Process is the easiest part.
26:44
The bastion that we now need to win over is the leadership, and that
26:48
means we need to get the boards to hire already the right CEOs
26:52
because some CEOs, they don't know.
26:54
Once they know, they will do it.
26:56
But some CEOs are very stuck in, you know, an execution mindset, and it's gonna
27:01
be very hard to turn them into what I like to call the entrepreneurial leader.
27:06
And you don't have to be a Jeff Bezos to be an entrepreneurial leader.
27:09
Bracken Darrell of Logitech was a very entrepreneurial leader
27:13
without having been an entrepreneur.
27:14
He's been a corporate person forever, but he has that entrepreneurial
27:18
CEO mindset and has a dual mindset.
27:21
Exploit and explore at the same time in harmony
27:25
I remember Gary Hamel used to say this, that, you know, in, in the way the world
27:29
is today, the business environment, you need the entrepreneurial leader.
27:34
Ideally, if it was somebody who actually did be an entrepreneur in the past,
27:38
but failing that, learning new things, learning new tools, learning new lenses.
27:44
Just a word on the head of innovation who doesn't have the training.
27:48
I see this all the time.
27:49
I was that person, and actually, it's led to this brilliant v- journey
27:53
that I've been on to learn, because when I was head of innovation for
27:57
the national broadcaster here in Ireland, I did a lot of good things,
28:00
but they were all low-level things.
28:02
They were all… You know what?
28:04
It didn't really matter if they happened or not.
28:06
They were kind of innovation theater.
28:08
But I actually thought they were good, but then as I've learned more and more,
28:13
and I realize so much more content is out there, I realized how little I knew, and
28:19
actually, it's why I do the show and why I try and democratize this knowledge and
28:23
share it with the world, much like you do.
28:25
But it's to help almost the inner child, young Aidan, and go, "Here, reach out
28:32
and help people like me in the past." Because actually, they don't know what to
28:36
do, and they weren't taught what to do, and often you're put into that position
28:39
'cause your personality is right, you're entrepreneurial, you have great ideas.
28:44
None of that is innovation.
28:46
It's highly, highly disciplined, and that's the biggest lesson I had.
28:49
And when I work with organizations myself, I'm telling them, "That's
28:53
the type of person you wanna tr- you want in the role." It's almost like
28:56
the shift to data-based marketing.
28:59
You want a marketer that, yeah, has great ideas and knows good brand and
29:03
knows good from bad, but actually can measure the life out of things
29:07
because actually that's the discipline
29:09
Yep.
29:10
And that's, again, the ideas are the easy part, right?
29:13
How to make that work is wh- why we came up with playbooks also,
29:18
because the other thing is that nobody has time for training.
29:21
Everybody's under huge pressure.
29:22
You know, big corporations, small corporations, they have to deliver.
29:26
There is very little time to learn.
29:29
So what if you could package things in a way that learning is a byproduct?
29:34
Because, you know, some people are passionate about learning per
29:37
se, but at the end of the day, when you have a job, learning is
29:40
just, you know, a means to an end.
29:42
So what if you can get to those skills?
29:44
That got us really passionate about playbooks and, you know, one playbook
29:48
was explicitly on how do I know if I should invest in a project
29:53
or if I should kill a project?
29:54
Like what, how, how risky is that still?
29:57
Those are things that are technical that you can easily make the playbook for
30:00
okay, man.
30:01
Well, we're gonna take people out of your misery.
30:03
Young Aidan, not that young, 20 years ago Aidan, I'm gonna reach back
30:07
and go, "Here you go, man. Here's a playbook. So Alex is gonna teach you
30:11
and hopefully help many other heads of innovation that listen to the show."
30:16
Okay, I'm gonna, I'm gonna show you a quick playbook.
30:18
Let me just switch here on my screen, see if I can make it happen.
30:23
So we developed, a playbook library where you have a ton of playbooks
30:31
because all of these are things you need to know as, you know, head
30:34
of growth and strategy, et cetera.
30:36
So it's a library that you get access to.
30:38
Now, the playbook that we start to look at, I, I just prepared this.
30:43
I made a project here for the innovation show, and we just look at a playbook.
30:50
So playbook is basically a step-by-step approach that tells me a little bit, you
30:54
know, what to do, just like I did now, but then you immediately do it, right?
30:58
So say, do, say, do, say, do all the time.
31:00
So here I have one on how market-ready is your project.
31:04
So that's an assessment I can go through.
31:07
So first one here is, okay, navigating risk and uncertainty.
31:11
This is a video that, you know, first you watch and you get a little
31:15
bit of the stuff I just told you.
31:17
So you do need to learn a bit, but the point is, you don't learn for too long.
31:22
You immediately go and apply.
31:23
So what I mean with that is apply… Well, first, what if
31:27
we had a little theory thing?
31:29
So in this case, I clicked on the second step, and the second
31:33
step brings us to an exercise.
31:36
But then we wanna go as fast as possible to our own project.
31:38
So here, just so we understand, let's take these Amazon projects and put them
31:43
on a scale from explore to exploit.
31:46
Is this a new idea?
31:47
We have no clue if it's gonna work, or is this managing
31:50
the existing business, right?
31:51
So pretty straightforward, you know, start to offer Amazon Web
31:55
Services, launch the Amazon Kindle, open new distribution warehouses.
32:00
You can already see innovation is everywhere, but this
32:02
is much closer to exploit.
32:04
It's gonna be much easier to open a new warehouse than to
32:07
start Amazon Web Services.
32:09
So guess what?
32:10
Amazon did not say, "Hey, give me a business case and I'm gonna invest in
32:14
the business case." They said, "Okay, the business case could be interesting.
32:18
Let's try it out." So they started to experiment, right?
32:22
So now if I go back and I show you just exactly what I told you
32:27
theoretically, we can do it practically.
32:30
So I showed you levels of evidence.
32:32
Okay, so let me scroll down here somewhere further down after I map my idea.
32:38
I have a step, step six here that's called assess and score
32:43
the customer evidence that I have.
32:45
So I click on this step, and it immediately asks me to score
32:50
the evidence for my customer.
32:52
So let's say here I put up a sticky note, you know, I'm selling to
32:58
innovation, uh, uh, leaders, okay?
33:02
That's my first customer segment.
33:05
Now, I need to show the evidence that I have, level one, what people
33:12
say, level two, three, four, five, that shows the needs that they have.
33:17
So, oh, you know what?
33:18
I actually, after the show with Aidan, I talked to a hun- let's say a 10, talked
33:26
to 10 innovation leaders, 10 interviewees, okay, um, said they have this problem.
33:36
Or let me make it more realistic and say five out of 10.
33:40
So I start to collect the evidence that I have.
33:44
So right now, I'm just collecting the evidence, showing the evidence that
33:49
I have, that I understand my first customer segment, innovation leaders.
33:54
And if I cannot show that evidence, I haven't done my homework yet, so I
33:59
shouldn't even start to think about the solution because, you know, I need this.
34:03
So as a project doer, I need to collect the evidence on customers first.
34:09
As a leader, I need to ask the team, "Hey, you're starting to work on
34:13
the solution. Do you have evidence that you understand the problem the
34:16
customer needs?" So you go back and push them back to show me the evidence.
34:21
So the key word here is show me the evidence on a scoring level from what
34:27
people say, reactions to artifacts.
34:29
Oh, I just made a mistake, right?
34:31
Because I said That I talked to f- 10 people, five said they had this problem.
34:38
Did I actually show them something very concrete, an artifact
34:43
that they could react to?
34:44
No, no, no.
34:45
So the leader just asked me, right?
34:47
Well, you know what, then it's actually level one evidence because I didn't
34:50
show them a concrete situation.
34:53
Oh, when you were in this context, did you know in which projects to invest or not?
34:57
So I just caught myself giving myself a level two score when it
35:01
was actually a level one, right?
35:03
So you can start to have an objective conversation based on these levels.
35:08
So you move away the conversation around evidence away from, "I think
35:13
this is a great idea," to, "Well, what's your evidence and what
35:17
score does that evidence have?"
35:19
So now the whole thing is less about leader's opinion
35:24
versus the team's opinion.
35:26
It's the team's evidence for the customer versus does the leader believe you
35:33
that that evidence is strong enough?
35:35
And now, of course, you'll always have leaders that will say, "Well, I don't
35:39
really care what your evidence is," but then you just have a bad leader, right?
35:42
The best leaders will start to have an evidence-based conversation.
35:47
So this was just scoring, around the, assessment of the
35:52
e- evidence for customers.
35:53
So then you do the same for the solution, you do the same for willingness to pay.
35:58
But we just walk you through kinda going through collecting that
36:03
evidence and giving it a score.
36:05
So we make it ultra practical from a very technical thing away from educating you,
36:11
from getting you to do it on the spot.
36:13
Because this is, again, it's not rocket science.
36:15
We're not doing surgery.
36:17
We're scoring an idea.
36:19
So this is what our idea of playbooks is getting people to do it, to work on their
36:24
project, not fictional stuff, on the spot.
36:27
So at the end, you have a score of where your project is today.
36:31
So that's just an illustration of a playbook
36:34
Absolutely love it, man.
36:35
I love it.
36:35
I, I was thinking about how, , we had Timo Vuori and Quy Huy on the show
36:40
talking about Nokia's reinvention and how Nokia moved into the networks business.
36:45
And what they said, essentially, was the whole company, firstly, they had
36:49
psychological safety, where it was okay to call out a bad idea or a good idea.
36:53
But more than that, they moved towards a data-based approach to things.
36:57
And I always think of that brilliant line, one of my favorite lines ever,
37:01
Upton Sinclair, "It's difficult to get a man to understand something when their
37:05
salary depends on not understanding it." This takes that out of it.
37:09
I mean, this makes it data-based.
37:12
And, you the big thing is, I often think about this, you're, you're
37:16
in a room, ideas are presented.
37:18
Maybe it's a brainstorming session.
37:21
S- the leader makes it very, very clear which ideas they prefer, and to go
37:26
against that and to be the person who go, goes, "Yeah, yeah, sorry. Sorry,
37:30
boss. I, you know, I just think it's a terrible idea," they're gonna keep
37:34
receipts on that, and they remember you.
37:36
And they're… You know, I've seen this happen where in the, in the
37:39
hallway afterwards, getting coffee, the leader's like, "Yeah, Aidan was very
37:43
negative in that meeting, wasn't he?"
37:45
Here's, here, here's the thing that gets really interesting, right?
37:48
Because those are real aspects that we're dealing with.
37:51
But, you know, let's take a session like this where one leader might
37:55
say, "Well, we have the evidence that customers care." Well, you know what
38:01
I say, and it's a bit harder for an internal person, is to say, "Okay.
38:04
Well, tell me what that evidence is." "Well, we just know." Okay, so what
38:08
I'm gonna capture here is Mark said in the meeting on this date that we know.
38:14
And then it's, you know, it's on the line, right?
38:16
So just bec- he said we know.
38:18
W- so it's okay, it's actually, it's okay to proceed without evidence, but it needs
38:25
to be explicit because I'm not dogmatic.
38:29
If you wanna do projects with zero evidence, be my guest.
38:32
If you have the money to waste, that's okay.
38:35
And sometimes you need to go fast, so you're gonna take a risk, right?
38:38
But it needs to be explicit.
38:40
Are we investing based on evidence or are we investing based on faith, right?
38:45
So, so when you get leaders to have to put their name on it, we just know, I believe
38:51
it's gonna work in an evidence-based world, it's gonna get very tricky, and
38:55
they usually backtrack very, very quickly
38:58
Fantastic.
38:59
And I led with the idea of the cat, Alex, Oscar the Cat jumping up on beds.
39:04
If companies wanna reach out to you and Strategyzer to come and jump on their
39:08
projects and let them know if they've got a hope or not, is the best place
39:13
for them to find you and the playbooks?
39:16
Everything's available on the website.
39:18
Just go , to Strategyzer.com.
39:20
Can Google my name also, you'll end up with Strategyzer.
39:23
We put a lot of stuff out there.
39:25
So typically, we make the theory, the concepts accessible
39:28
because we want it to spread.
39:30
For those of, you know, who don't wanna kinda figure out on their own how to
39:34
apply it, they just go and have a look at the playbooks or get to talk to us.
39:38
So we're really in that.
39:39
We're passionate about getting people to work the right way
39:43
Author of The Invincible Company, Testing Business Ideas, High Impact
39:48
Tools For Teams, Value Proposition Design, and The Business Model Canvas.
39:52
And there's a business book for kids that Alex especially wrote for his
39:56
own kids, which I also have a copy of, which I'm, I haven't pulled it out yet.
40:00
They're not quite there yet, Alex, but they certainly will be.
40:04
They'll s- be sick of me.
40:05
They'll be going through all these canvases to validate ideas.
40:08
But always a pleasure to have you on the show, and we'll be back.
40:11
Just let's give a little preview of what we'll be back
40:13
next week to talk about, Alex
40:15
I'd really love to talk about value propositions.
40:18
Big theme and not a lot of companies get their value propositions right
40:23
Author of Value Proposition Design, our next episode, Alex Osterwalder.
40:27
Thank you for joining us
40:29
Just to let you know, you can win a copy of one of Alex books just by
40:33
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40:38
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40:59
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