Built to Thrive:Built to Thrive:Perspectives on new business Perspectives on new business

modelsmodels

Dr. Jay van ZylDr. Jay van Zyl

Built to Last1950-1990

Top companies that outperformed their competitors: 3M, Sony, IBM, HP,Motorola, Walt Disney, Boeing…

Built to Flip1994-2002

Companies that were built to be sold:PayPal, WebMD, MyCFO, Netscape…

The world is accelerating change, innovation is the only insurance against irrelevance…

- Gary Hamel

Built to Thrive2002-2015

Companies that are built to thrive: Google, Amazon, Toyota, Dell, Neopets, Apple, Nokia?

Create movements, shift minds, Create movements, shift minds, think differently, and reframethink differently, and reframe

Reframe in order to reconfigure

Create chaos, but then lead the pack as a prime mover

Create movements, shift minds, Create movements, shift minds, think differently, and reframethink differently, and reframe

Create movements, shift minds, Create movements, shift minds, think differently, and reframethink differently, and reframe

Prime Mover:1990’s: Innovation to Sales2000’s: Sales to Innovation“make the best products”

Fast Follower:1990’s: Follower to Sales2000’s: Sales to Bureaucracy“be the richest at all cost”

Create movements, shift minds, Create movements, shift minds, think differently, and reframethink differently, and reframe

Steve Jobs back at Apple as CEO

Steve Ballmer takes over as

CEO at Microsoft

How do you systematize innovation?How do you systematize innovation?A:A: The system is that there is no system. The system is that there is no system.

In interviews and on blogs, some employees In interviews and on blogs, some employees say you've instituted bureaucracy that is say you've instituted bureaucracy that is hampering innovation so much so that they hampering innovation so much so that they question whether you should be CEO. What's question whether you should be CEO. What's your response?your response? A: A: At the end of the day, the proof is in the output. At the end of the day, the proof is in the output. Do we have the innovation output? Do we have the Do we have the innovation output? Do we have the market share? Do we have the customer market share? Do we have the customer satisfaction? Do we have the numbers? And do we satisfaction? Do we have the numbers? And do we have the talent? So you go through each one of have the talent? So you go through each one of those things and say, how are we doing? We've those things and say, how are we doing? We've grown from 18% of the profits of the top 25 grown from 18% of the profits of the top 25 companies in our industry to 23% of the profits of companies in our industry to 23% of the profits of the top 25 companies in our industry over the last the top 25 companies in our industry over the last five years. Profits are up over 70%, where the five years. Profits are up over 70%, where the industry profit is up about 35%. Pretty good. industry profit is up about 35%. Pretty good.

Understanding the business Understanding the business landscape as an ecosystemlandscape as an ecosystem

Challenge business, industry and social norms

Reason with uncontaminated thinking

Understand divergent and convergent cycles

Don’t be chained to the value chain, towards value networks

Redraw industry boundaries

Understanding the business Understanding the business landscape as an ecosystemlandscape as an ecosystem

Google bought YouTube a year or so ago US$1.65billion [about R11.8billion]

YouTube, founded in 2005, is a consumer media company helping people to share

videos for free...

Understanding the business Understanding the business landscape as an ecosystemlandscape as an ecosystem

A new era emerging…# Brand Brand Value ($m) Brand Value Change1 Google 66,434 77%2 GE (General Electric) 61,880 11%3 Microsoft 54,951 -11%4 Coca Cola 44,134 7%5 China Mobile 41,214 5%6 Marlboro 39,166 2%7 Wal-Mart 36,880 -2%8 Citi 33,706 9%9 IBM 33,572 -7%10 Toyota 33,427 11%

Become a pace setter by Become a pace setter by driving ecogenetic changesdriving ecogenetic changes

Many small changes

Make new interconnections never thought possible before

Bring together the realms of thinking and doing

Learn fast, execute systematically

Become a pace setter by Become a pace setter by driving ecogenetic changesdriving ecogenetic changes

eBay bought Skype a few months ago for US$4.1billion [about R25.8billion]

Skype, founded in 2003, is a supplier of a free internet telephony product…

…and lost money last year on total revenues of about US$7million

Shape your business around Shape your business around customer innovationcustomer innovation

Design an alternate future for your customer

Get the customer to co-design and

co-produce your offering

Customerize your proposition

Separate participative customers from economic customers

Shape your business around Shape your business around customer innovationcustomer innovation

Shape your business around Shape your business around customer innovationcustomer innovation

5,960,411 -- Method and system for placing a purchase order via a communications network (One-click purchase).5,715,399 -- Secure method and system for communicating a list of credit card numbers over a non-secure network.5,727,163 -- Secure method for communicating credit card data when placing an order on a non-secure network.5,826,258 -- Method and apparatus for structuring the querying and interpretation of semistructured information.5,963,949 -- Method for data gathering around forms and search barriers.5,999,924 -- Method for producing sequenced queries.6,029,141 -- Internet-based customer referral system (Affiliate program).6,525,747 -- Method and system for conducting a discussion relating to an item.

Amazon Patents

Innovate offerings and not just Innovate offerings and not just products and servicesproducts and servicesReconfigure value creating systems

Assemble offerings from products and services

Integrate intelligence into proposition

Products are frozen knowledge and services are fluidexperiential and contextual

Innovate offerings and not just Innovate offerings and not just products and servicesproducts and services

Centered on the theme "Innovation into the Future," the Centered on the theme "Innovation into the Future," the Toyota Global Vision 2010 proposes the corporate image for Toyota Global Vision 2010 proposes the corporate image for which all of Toyota should strive and the paradigm change which all of Toyota should strive and the paradigm change Toyota should undergo. Toyota should undergo.

““As our society fast approaches a historic As our society fast approaches a historic turning point, new values are beginning to turning point, new values are beginning to emerge. In response to this era of sweeping emerge. In response to this era of sweeping change, Toyota is working hard to create change, Toyota is working hard to create breakthroughs.“breakthroughs.“

Innovate offerings and not just Innovate offerings and not just products and servicesproducts and services

Innovate offerings and not just Innovate offerings and not just products and servicesproducts and services

Mobilize your capabilitiesMobilize your capabilities

Leverage automation capabilities

If it doesn’t work internally, move it outside

Challenge execution dogma

Prototype early, execute fast and correct quickly

Innovate offerings and not just Innovate offerings and not just products and servicesproducts and services

Manage economies of Manage economies of scope to achieve scope to achieve

economies of scaleeconomies of scale

Focus on innovating the human experience and automate all else

Expand your innovative ideas after you’ve defined the context; flipping the funnelLeverage integrated value networks to

create new options for the future

Manage economies of scope to Manage economies of scope to achieve economies of scaleachieve economies of scale

Change your paradigm from Change your paradigm from the information age to the the information age to the

age of accessage of access

Products are services, services are products

It’s in the way you deliver it

Access to networks

Beyond information, fifth megawave of transformation

Change your paradigm from Change your paradigm from the information age to the the information age to the

age of accessage of access

Learn from an Learn from an uncontaminated generationuncontaminated generation

Frame into the minds of the young

Experiment like you’ve never done it before

Discuss it like it’s never happened

Learn across borders; use another industry to test your ideas

Play, think, do

Learn from an Learn from an uncontaminated generationuncontaminated generation

Lead by living your business Lead by living your business philosophy philosophy

Translate your vision into a philosophy people can believe in

Allow your people to remove themselves from their situation traps

Lead by living your business Lead by living your business philosophy philosophy