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#INBOUND16
STOKING THE FIRES
Practical guide to creating your own Skunk
Works & driving innovation from within
Nicholas L. Holland, Director of Product
#INBOUND16
STORIES OF DISRUPTION
ARE EVERYWHERE…
#INBOUND16
MARKET MAKERS
NOT JUST SHARE-TAKERS…
#INBOUND16
TIRED OF PLAYING DEFENSE
READY FOR OFFENSE
#INBOUND16
TECHNOLOGY
EXPLOSION
(specifically, digital…)
• Emerging solutions
• Evolving business models
• Changing customer behavior
• Erasing previous advantages
#INBOUND16
TRANSFORMATION &
REINVENTION TO
EMBRACE DISRUPTION
These aren’t scary words
#INBOUND16
INNOVATORS
DILEMMA
(you can’t read this enough…)
Successful, established companies are
prisoners of their success. They can
neither withdraw from their profitable core
business nor are they able to assert
themselves in small, emerging markets
with uncertain prospects for success due
to their processes and structures
#INBOUND16
I SENT HELP
THREE TIMES!
… you weren’t listening
#INBOUND16
INNOVATION
IS A MEANS
TO AN END...
“He who knows others is
wise; he who knows
himself is enlightened.”
― Lao Tzu
#INBOUND16
• Diversify Revenue
• Explore business models
• Solidify your position
• Respond to competition
• Disrupt yourself
• Avoid disruption
• Provide fresh ideas
• Increase growth
• Attract & retain Talent
• Transform Culture
• Open up new markets
The many values of Innovation
#INBOUND16
• Diversify Revenue (save / make)
• Explore business models (save / make)
• Solidify your position (save)
• Respond to competition (save)
• Disrupt yourself (save / make)
• Avoid disruption (save)
• Provide fresh ideas (save / make)
• Increase growth (make)
• Attract & retain Talent (save / make)
• Transform Culture (make)
• Open up new markets (make)
The many values of Innovation
#INBOUND16
YOU SHOULD ESTIMATE THE
COST OF NOT INNOVATING
#INBOUND16
Avoid Innovation
Theater
Unless you just want to feel better...
#INBOUND16
“CORPORATIONS FOCUS
SO MUCH ON EXECUTION
THAT THEY FORGOT HOW
TO INNOVATE”
- Steve Blank
#INBOUND16
SKUNK
WORKS
…Cool name for a Corporate
Innovations Lab
• Lockheed Martin
• 1943 - Today
• Secretive Projects
• Up to 4 Decades to develop
#INBOUND16
SKUNK
WORKS
…Cool name for a Corporate
Innovations Lab
• Small Team
• Autonomous
• External to Bureaucracy
• Advanced mission
#INBOUND16
CORE PRINCIPLES OF
INNOVATION
And knowing thy enemy
#INBOUND16
Speed
Rapid Iterations & Reactions
vs.
methodical, stay the course until told otherwise
#INBOUND16
Agility
Make & Act Upon Decisions Quickly
vs.
run things past others, periodic planning/approval
#INBOUND16
Fearless
Comfortable With Known Unknowns
vs.
desire to de-risk, protectionism, avoiding failure
#INBOUND16
Experimental
Repeatedly Testing Hypothesis With Data
vs.
stick to the plan the group agreed upon
#INBOUND16
Streamlined
No Bureaucracy Or Red Tape (more speed)
vs.
hierarchy, CYA, check with legal / other departments
#INBOUND16
Empowered
Personal Ownership, Speed Of Decisions
vs.
seek consensus, get management blessing
#INBOUND16
Focused
Clear Definition Of Success (1-2 key metrics)
vs.
whiplash to whatever the executives fear
#INBOUND16
Constrained
Necessity Is The Mother Of Invention
vs.
“fat startup” with plenty of resources & no consequences
#INBOUND16
“A STARTUP IS A COMPANY
DESIGNED TO GROW FAST”
-Paul Graham
#INBOUND16
1. Don’t build services for money, but make money to build more services
2. It's not about you, it's about what you do for customers
3. Stop focusing on limits, focus on possibilities
4. Speed kills… The Quick Shall Inherit the Earth
5. Greatness & comfort rarely co-exist
6. 20/20 Vision - Short view + Long view
7. Disrupt yourself or someone else will
NOTHING FUNNY ABOUT STARTUP CULTURE
#INBOUND16
BOTTOM LINE
Customers don’t care if you’re a
startup or corporation. They only
care about the value you provide
to them
#INBOUND16
SO LET’S
RECAP
(context before tactics)
● Recognize “Innovate or Die”
● Embrace Reinvention
● Place a value on Innovation
● Explore through Skunk Works
● Honor Innovation Core Values
#INBOUND16
TACTICS… LET’S DO THIS!
#INBOUND16
IF YOU DON’T HAVE A BIG
GOAL YET, THEN START BY
LEARNING & ASSESSING
Choose the mountain you want to climb
#INBOUND16
INNOVATION
OUTPOST
Phase 1: ‘Sense’ the market
• Learning & Exploring
• Located in Innovation Clusters
• Trends & Technologies
• Competitors
#INBOUND16
INNOVATION
OUTPOST
Phase 2: ‘Respond’ to
observations
• Invest
• Incubate
• Acquire
• Partner
• Invent
#INBOUND16
“I HAVE NOT FAILED. I JUST
FOUND 10,000 WAYS THAT
WON’T WORK”
- Thomas Edison
#INBOUND16
LET’S BUILD SOMETHING
#INBOUND16
1. Executive Support
2. Protected Budget
3. Small Team
4. Entrepreneurial Leader
5. Periodic Check-ins
6. Short term wins, Audacious Goals
CRITICAL ITEMS FOR KICK OFF
#INBOUND16
You Need The CEO
(Real support, not Lip Service)
#INBOUND16
Make a Real
Investment
(appropriate funds or all is lost)
#INBOUND16
Small, Autonomous
(Minimal Dependencies)
#INBOUND16
THE TEAM IS
CRITICAL
(Game is won/lost here)
• Entrepreneurial
• Transformative
• Bold + Fearless
• Challengers
• Customer Obsessed
• High GSD Factor
#INBOUND16
CAREFUL HOW YOU
STRUCTURE COMPENSATION
#INBOUND16
SCIENCE FAIR
Bi-monthly showcase for team to
show progress, discoveries, and
impact
Repeat the Mission
Identify the Pain
Demonstrate Solution
Show Customer Impact
Explain Corporate Impact
#INBOUND16
IMAGINE IF YOU HAD NO
MEETINGS HOW MUCH
WORK YOU’D GET DONE…
Meetings must die
#INBOUND16
LEAN STARTUP
METHODOLOGY
(Ironically, Better for
Corporations)
• Problem
• Solution
• Key Metrics
• Unique Value Proposition
• Unfair Advantage
• Channels
• Customer Segments
• Cost Structure
• Revenue Streams
#INBOUND16
Perfect is the Enemy
of Done
(Plus, nobody is perfect)
#INBOUND16
Always Be Shipping
Iterate, Observe, Iterate (quickly)
#INBOUND16
OODA
The faster you make this loop, the
faster you innovate & surpass the
competition
#INBOUND16
MAKE
HAMBURGER
Kill the Sacred Cows
Solve for the customer, not
the corporation!
#INBOUND16
LET THE INNOVATION SEEP INTO
YOUR LEADERS, THEN IT FLOWS
THROUGH YOUR ORG
#INBOUND16
ALL OF THIS
IS REALLY
HARD
The corporate forces that stifle
innovation will most likely kill your
Skunk Works by sucking it back into
machine
#INBOUND16
You are too small
(you can’t afford a separate team)
#INBOUND16
Lack of Talent
(wrong people, wrong internal development)
#INBOUND16
Conflicting Missions
(Avoid ‘default corporate winner’)
#INBOUND16
BEWARE THE UNINSPIRED
COMPROMISE… IT IS THE
ROAD TO DEATH
#1 reason to keep input circle small
#INBOUND16
KEEP THE PRIORITY:
CUSTOMER > EV > TEAM > ME
#INBOUND16
MUTUALLY
AGREED UPON
EXPECTATIONS
(Between Skunk Works & Execs)
• Goals
• Metrics
• Timeline
#INBOUND16
MUTUALLY
AGREED UPON
EXPECTATIONS
(Between Skunk Works & Execs)
• Disruption?
• Customer Solution?
• Indefinite?
#INBOUND16
CAREFUL OF ‘THEM VS US’
INNOVATION ISN’T A MONOPOLY
#INBOUND16
1. Do we agree on honoring innovation while executing
2. Do we agree on the mission
3. Do we agree on the metrics
4. Do we agree on the budget & runway
5. Do we agree on the leader & team
6. Do we agree on how we extract value
INNOVATION ALIGNMENT
#INBOUND16
• STREAMLINED
• EMPOWERED
• FOCUSED
• CONSTRAINED
TEAM CORE PRINCIPALS
• SPEED
• AGILITY
• FEARLESS
• EXPERIMENTAL
#INBOUND16
• Diversify Revenue (save / make)
• Explore business models (save / make)
• Solidify your position (save)
• Respond to competition (save)
• Disrupt yourself (save / make)
• Avoid disruption (save)
• Provide fresh ideas (save / make)
• Increase growth (make)
• Attract & retain Talent (save / make)
• Transform Culture (make)
• Open up new markets (make)
The many values of Innovation
#INBOUND16
TRUE FAILURE COMES
FROM LACK OF LEARNING
There are so many ways to extract value
from a Skunk Works beyond core mission
#INBOUND16
THANK YOU.
#INBOUND16
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