Learn how a group of corporate innovation leaders, change agents, and intrapreneurs implemented a Lean innovation incubator inside a Fortune 14 organization. Hear the story of The Garage, challenges to innovation in the enterprise, and lessons we have learned along the way.

1. Corporate Innovation
2.25.2016 Lean Startup NYC Enterprise Summit

2. Pac Man style

3. This is your company.
Look at me! I’m huge.

4. This is your competition.
Look at us! We’re huge.

5. This is you versus your competition.
Chomp! Chomp!
Chomp! Market share!
Oh, him again.

6. Meanwhile in startup land…
Look at us! We’re tiny.
And starving!

7. Startups come attacking!
Look how cute they
are!
Let’s get ‘em!!!

11. But the battle is different.

12. Traditional battle
We’ve improved
efficiency by 2.1%
We’ve added a new
button to our portal.
Crap.

13. Startups attack bits of you.
Our shiny new product
is 10x better!
attack!
attack!
attack!
attack!
attack!attack!
Ours is full of clouds
and unicorn dust!
Ours has robots and
we give it away!

14. And then tiny little startup gets big. Fast.
Whoa I’m huge.

15. And starts chomping your market share.
Burrrrp

17. “There’s no chance that the iPhone is going to get
any significant market share,” “No chance.”
Steve Ballmer, 2007

18. “Neither RedBox nor Netflix are even on the radar
screen in terms of competition,” “It’s more Wal-Mart
and Apple.”
Blockbuster CEO Jim Keyes, 2008

19. “An iPhone belongs in your pocket, not on the road”
Porsche CEO Oliver Blume

20. Big huge company needs innovation
Go be more disruptive
and innovative!
(What does that
mean?)

21. Go be more disruptive
and innovative!
(What does that
mean?)
And then…

22. Probably looks something like this.

23. Submit all your ideas
and become a hero!
Sweet! We are so
innovative. What a
great company.
Strategy 1: Magic Ideas Box
Magic Ideas Box

24. Strategy 1 FAIL:
Process and procedures for magic ideas box:
All ideas submitted by employees, both foreign and domestic must complete Form 495b
on our sharepoint site located at http://intranetpagesfullofforms.company.net and is
only accessible if you are behind our company firewall or if you have completed Form
863z located at http://intranetpagesfullofforms.company.net and signed our waiver of
rights and been approved by your manager to submit ideas. After submission, your idea
will progress through our stage-gate process developed by our top process-driven
experts. Stage-gates ensure that ideas conform to our idea-generation policy and that
we don’t go pursuing any crazy sounding ideas. After completing steps 1-6 of the stage-
gate process, you may or may not hear anything back about your idea. If your idea
passes step 7, it will then be reviewed by a committee of senior leaders who have all
the qualifications for judging the merits and benefits of pursuing your idea. Step 8 is
where the committee determines if the idea fits their business unit strategy, and if it
doesn’t your idea will be killed and you may or may not be notified. If your idea passes
all 16 steps of the stage-gate process (we’re not sure what the last 8 stages are for but
they sounded pretty good), you will be invited to pitch your idea to our executive panel.
This will require a 40 page powerpoint and must include a full business plan and CBA of
which we’re confident you have all the expertise to produce. The executive panel will
judge your idea based on its conformity to our business strategies of which we have
hundreds of powerpoint decks that we can show you. If your idea is chosen, we will put
your picture on our intranet site to make you a star among your peers and to let all other
employees know how innovative we are being, and then you will have the privilege of
working on this idea in any spare time you have while maintaining 100% of your normal
work duties without any extra compensation.

25. Make your stuff more
cloud-like and digital
and sexier.
That’ll show ‘em!
Strategy 2: Upgrade

26. Yikes. @**$*!
Strategy 2 FAIL:
Um…

27. Act like a startup.
OMG! We are so cool.
We get to be
entrepreneurs!
Strategy 3: Act like a startup

28. We can’t have that. Try
to be more in-the-box.
We’ve done it! But it
might eat our own
business.
Strategy 3 FAIL:

29. Hi unicorn.com team,
we’d like to acquire
you.
Cha-ching!
Strategy 4: Buy them

30. Try to be more like us.
But our culture is what
made us great. Now
we’re just OK.
Strategy 4 FAIL:

31. Let’s do an accelerator
so we can find cool
startups!
Brilliant!
Strategy 5: Do an accelerator

32. Strategy 5 FAIL:
We didn’t get the best
ones.
What do we do with
them now?

33. These are not bad strategies.

34. Just sometimes poorly executed.

35. And often without the big picture in mind.

36. Let’s talk about Strategy 3:
“Act Like a Startup”

37. Some of the stuff you’ll run into

38. (I’ve dealt with all of them)

39. Manager stuff
Innovators Management
Our first eight ideas
failed.
Unacceptable.

40. Legal stuff
Innovators Lawyers
Totally brand new
product!
We don’t have
precedence for that.
Might get sued.

41. Procurement stuff
Innovators Procurement
We want to use
external services and
new vendors!
Oh, no, no. Those are
not approved.

42. Finance stuff
Innovators Finance
Can we have some
money? What’s your 5 year pro-
forma?
We made it up.
Denied.

43. PR stuff
Innovators PR
We’re going to explore
a totally new market.
No way! Our
competitors might
make fun of us.

44. Business Unit stuff
Innovators Business Unit
Will you sponsor our
rad new product?
That’s not in my one-
year plan, sorry.

45. Marketing stuff
Innovators Marketing
Check our sweet new
product!
Stop it. That might
tarnish our sacred
brand.

46. Technology stuff
Innovators IT
Can we open-source
and do agile?
We do big expensive,
lengthy IT.

47. Sales stuff
Innovators Sales
Will you help sell our
new product?
We don’t get
commissions for that.

48. Account stuff
Innovators Accounts
We’ve talked with
CustomerX and…
Who gave you
permission to talk to
them??!

49. Security stuff
Innovators Security
Can we punch holes in
our firewall?
No.
He’s on our list now.

50. Recruiting stuff
Innovators Recruiting
We need more
entrepreneurial people.
We don’t know how to
source those.

51. Human Capital stuff
Innovators Human Capital
We have
entrepreneurial people.
We don’t have job
codes or development
programs for them.

52. Real Estate stuff
Innovators Real Estate
We need collaborative
space where teams
can mingle.
We have cubes so
people don’t have to
see each other.

53. There are strategies you can take.

54. Management Strategies
Do some homework
Know your organization and what motivates it
Growth trajectory - declining or growing?
Gauge pressure from startups
Know how innovation has worked in the past
Create a PMT

55. Legal Strategies
Invite them to happy hours
Implement regular office hours
Create a playbook and framework
Get comfortable with a little risk

56. Procurement Strategies
Invite them to happy hours
Show them what cool stuff they can help with
Carve out a procedure for:
non-vetted vendors
new services/technology
Legal will definitely be involved

57. Finance Strategies
Understand your BU’s financial goals and metrics
Build a tranche-based model
Start small
Add a team member to your PMT

58. PR Strategies
Don’t talk to media
Be prepared to get into trouble eventually
(when someone does talk to media)
Damage control
Start off-brand if you can

59. Business Unit Strategies
Understand their 1-3 year strategies
Where are their gaps?
Know some failed initiatives
Where are the laggards?
Be prepared for politics

60. Marketing Strategies
Create market-listening sessions
Show them how big Lean Startup is
Help establish thought-leadership
Do things off-brand
Don’t use focus groups
Do 1:1 interviews

61. Technology Strategies
Understand risk-level of your innovations
Don’t invest in big IT until you have many customers
Ensure MVPs are also MVAPs (awesome)
Use agile
Teach IT how to reduce waste with Lean Startup

62. Sales Strategies
Infuse your innovations in EBC/Experience Centers
Wow and impress clients
For more mature products, create incentives
Invite them to happy hours
Understand where they’re getting beat up in market
Go along to client meetings

63. Account Strategies
Invite them to happy hours
Hire one of them
Showcase innovations for them
Provide regular updates of cool new stuff
Go along to client meetings

64. Security Strategies
Create a separate network
Don’t flaunt data protection rules
Protect your data and customer’s data
Ensure regulatory compliance

65. Recruiting Strategies
Invite recruiters to fun events
Maintain your own network of candidates
Run/participate in Lean Startup Challenges

66. Human Capital Strategies
Use all the wrong job codes
Entrepreneurial comp is not easy
Create your own development plans
Use lean startup on your own team

67. Real Estate Strategies
Don’t need anything too fancy
Have your team make it their own
Beg if you have to
Regularly invite C-Level clients to your space
Beg some more
Invite more C-Level clients to your space

68. Final Thoughts
Find those who figure out how to do vs. how not
Find those at fringe, not core
Measure everything - interviews, experiments,
burn, throughput, revenue
Continuously improve

69. Innovation Lifecycle

70. Validate the business model
Product sales/market
Operational and
support model
Strategic and BU
Alignment
Build sustainable
revenue pipeline that
meets product, profit,
organizational goals
Final decision on
ultimate landing
organization is
determined.
Test and validate solutions
Decision points at each
sub-phase.
1. Solution/Market
2. Product/Market
3. Revenue Growth
Validate market needs and solution ideas
Discover GM ongoing
reviews of active
concepts in formal
Discover phase.
PMT and BU review
progress against goals
(Sales, Revenue,
adoption,
organizational
readiness, Market
readiness) and makes
decisions on go-
forward, Pivot,
Shutdown
BU Sponsor is required
at all decision points.
PMT meets as needed
as each project
advances to next sub-
phase.
Once BU Sponsor is
obtained per project,
Sponsor joins the PMT
for sub-phase reviews.
Innovation Lifecycle Governance Model
Portfolio Management Team (PMT)
• Bud Flagstad
• KC
• Bob Plourde
• Bob Berkopec
• Dr. Shawn Merys
• Finance Resource (Eric Clarke)
Full Concept Brief
(Discover Output) is
reviewed for each
concept that has
completed the
Discover phase.
PMT selects concepts
to advance to Incubate
phase.
Discover Incubate IntegratePMT
PMT
(+ BU)
PMT
+ BU
< 3 Months 6 - 18 Months 12-24 Months
up to 70 / year up to 10up to 30
Full Concept Briefs (FCB) are prepared for each
concept that completes the Discover phase within the
quarter.
During meeting, PMT approves “solution ideas” to
advance to Incubate phase.
Overall portfolio is reviewed for capacity, financial,
funding, IOI and resource availability to factor in to
decisions.
Frequency: Monthly
PMT meets formally as each project nears sub-phase
decision point. Pre-read materials are sent and EIRs
present formally at each meeting. PMT then approves
decisions to advance to next sub-phase.
Overall portfolio is reviewed for capacity, financial,
funding, IOI and resource availability to factor in to
decisions.
Frequency: as needed per project, or quarterly,
whichever is sooner.
PMT plus BU Sponsor meets as needed to review and
approve at major decision-points.
Frequency: Quarterly. Sooner if warranted for critical
decisions.
The PMT is a small, odd-numbered decision-making group that
reviews and approves IRD projects as they move within and between
the phases of IRD’s Innovation Lifecycle. The PMT is accountable for
management of IRD’s Innovation Portfolio. Each member of the PMT
is responsible for participating in all meetings, in-person or by proxy.
PMT
PMT sets
broad areas
of interest
annually as
part of
strategic
annual
planning.
Advisors from BUs
• Optum Marketing
• Optum Insight
Advisors will have input and
contribute to overall portfolio
guidance, but not have direct
decision-making authority.

71. Thank you
kunjornchambundabongse
kunjorn
Let’s connect