Great Ideas Need the Right Metrics to Flourish; Building the Analytics You Need to Monetize Your Innovation Thursday, December, 5: 1:00 p.m. - 4:00 p.m. In the digital era, great ideas, innovations, and business models need to be implemented well, turned into profitable operations that scale well and adapt to new information as they grow. This isn't easy, but it is often the difference between great ideas that succeed and those that fail. For digital innovators, Analytics and data-driven decision-making have become key determinants of success. "If you can measure it, you can manage it." The right metrics often make the difference between monetizing innovation and under-performance. Yet identifying these "metrics that matter" isn't easy—the right metrics vary widely based on your business model—nor is it easy to build the required capabilities and collecting the necessary data. Fortunately there is a way to make it easier, and this presentation will share a better way to tackle the challenge. In this workshop, author and analytics veteran Jaime Fitzgerald will share his battle-tested method that addresses this challenge. During two decades working with data, Mr. Fitzgerald created a new method that makes it easier to define the metrics you really need to monetize your innovative ideas, business models, and initiatives. In addition to defining the "metrics that matter," Mr. Fitzgerald's methodology defines the analytic methods and data sources you need to generate these key performance indicators, and how they will be used to enhance key business decisions, essential processes, and business model evolution. Presenter: Konrad Kopczynski, Director, Fitzgerald Analytics Author: Jaime Fitzgerald, Founder & Managing Partner, Fitzgerald Analytics

1. Great Ideas Need the Right Metrics to Flourish
Building the Analytics you Need to Monetize your Innovation
Gilbane Conference 2013
December 5th, 2013
Architects of Fact-Based Decisions™

2. Table of Contents
1. Introduction
2. The Challenge of Monetizing Innovation
3. The Data to Dollars™ Approach
4. Examples + live cases (will be presented live)
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
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3. Introduction: Jaime Fitzgerald
Specialist in the process of turning Data into Results.
17+ years advising clients in Financial
Services, Retail, and Public Sector.
Created the Data to Dollars Value Chain™
framework & methodology, used by my team
at Fitzgerald Analytics to serve our clients.
Now “open-sourcing” the methodology via:
• The Book
• Online learning resources
• Training seminars on data-monetization
• Customized training + consulting
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
3

4. Our Mission
Make the invisible visible.
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
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5. Introduction: Fitzgerald Analytics
What we do:
Why we do it:
1
Build New
Analytic Capabilities
2
Improve Analytic Processes
Hundreds of Millions
of New Profits for
Clients (Concrete +
Documented)
3
Build Analytic Teams
100% Client Loyalty
Measure Intangibles
Staff Loyalty: Named
a Best Firm to Work
for 4 Years in a Row
4
5
Turn Data into Dollars™
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5

6. Table of Contents
1. Introduction
2. The Challenge of Monetizing Innovation
3. The Data to Dollars™ Approach
4. Examples + live cases (will be presented live)
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
6

7. Innovation Fantasy: The Best Ideas Will Win
=
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
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8. Innovation Reality: Execution Matters a Lot
VS
VS
VS
Early Car
Companies
VS
*Other Examples:
Tesla vs other Electric Car companies
JetBlue vs Delta Express
Segway vs Bicycle
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
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9. Why do innovative ideals fail to blossom?
Never Tried
Too Complex of an Idea
Tried and Failed
Uncharted Territory
Didn’t Resonate
with Clients
Wrong Team
Didn’t Capitalize on
Opportunities
Product Never Worked
as Intended
Unfortunate Timing
Unexpected Changes
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
9

10. What types of changes can Innovation Prompt?
Upgrade Existing Product
Create New Product
Adjust Target Market
Operational Efficiency
Product Design
Create New Market
Remove Barrier to Entry
Revive Old Product
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
10

11. Table of Contents
1. Introduction
2. The Challenge of Monetizing Innovation
3. The Data to Dollars™ Approach
4. Examples + live cases (will be presented live)
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
11

12. Application of The Data to Dollars™ Approach to Innovation
Using Analytics to enable Innovation.
What do these
mean?
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
12

13. What is Innovation?
Google’s Definition: The action or process of Innovating.
Innovating: Making changes in something established,
especially by introducing new methods ideas or products.
Ok, but how do we succeed?
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
13

14. Lets look at some examples
Elon Musk on Innovation
Takeaways:
1. Break concepts down
into their parts
2. Solicit Negative
Feedback (or iterate)
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
14

15. “Google Reveals its 9 Principles of Innovation” – Fast Company
1. Innovation Comes from Anywhere
2. Focus on the User
3. Aim to Be 10 Times Better
Breaking Down Ideas
4. Bet on Technical Insights
5. Ship and Iterate
6. Give Employees 20% Time
Get Negative Feedback
7. Default to Open Processes
Measure Impact
ID Success ..
8. Fail Well
ID Failure
9. Have a Mission that Matters
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
15

16. “A Simple Tool You Need to Manage Innovation” – Harvard Business Review
Takeaways:
1. Innovation is a PROCESS you
CAN and SHOULD manage.
2. Keys to managing innovation
1. Awareness of how
“ambitious” each
innovation initiative is
2. Allocate Resources
intentionally and
optimally across the
portfolio of initiatives
Have a Mission that Matters
Profile each Innovation:
- Source of impact?
- -- KPIs?
- -- Definition of Success?
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
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17. “The Discipline of Innovation” – Peter Drucker
Innovation comes from the systematic analysis of 7 types of
opportunities:
1. Unexpected Occurrences
2. Incongruities
3. Process Needs
4. Industry and Market Changes
5. Demographic Changes
Analysis Drives
Recognition of +
Exploitation of
Opportunities to Innovate
6. Changes in Perception
7. New Knowledge
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
17

18. What does it take to innovate more successfully?
A few sources of perspective from the recommended reading…
Peter Drucker:
Observation  Analysis  Awareness of Opportunity 
Response
Nagyi and Tuff in HBR:
Understand your Business Model  Tailor Innovation Approach
to your Business Model & Strategy
Google in Fast Company:
Various “rules”. Theme of Ambition and Breadth of Approach.
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
18

19. Key Themes on Innovation
1. Manage the Process of Innovation
2. Set Goals
3. Seek Causal Clarity (ie. Pay attention to the technical)
4. Iterate
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
19

20. What is Analytics?
Google Definition: the systematic computational analysis of data or statistics.
Ok, but what do we do?
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
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21. What is Analytics?
Analytics is a Process
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
21

22. The Data to Dollars™ Stack
Plan:
Decisions, Actions, and Results
Made better by the right
Insights
Created by the right
Analysis
Which depends on access to the right
Data
And selection of the right
Tools, Platforms, Technology, People, and Processes
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
Act:
22

23. The Stack is Also a Value Chain…
Plan:
Decisions, Actions, and Results
Dollars
Made better by the right
Insights
To
Created by the right
Analysis
Which depends on access to the right
Data
And selection of the right
Tools, Platforms, Technology,
People, and Processes
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
Data
Act:
23

24. The Data to Dollars Value Chain™
1. Data
 New Data
Source
Acquisition
2. Analysis
3. Dollars
 Decisions
Analysis
Insight
 Actions
 Data Discovery
 Financial Impact
 Data Quality
 New Data
 Data
Governance
 New
Opportunities
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
Navigation
Tips:
1. Set Clear Goals
and translate into
concrete plans
2. Stay Agile (loop
back often)
3. Keep Oriented
(“line of sight” /
“why am I doing
this?)
24

25. From new idea to results: 5 key steps
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
25

26. Monetizing New Ideas Is Iterative…
2
1
3
Business Model /
Business Case
Idea v1.0
2
1
3
2
1
Idea v3.0
5
5
5
Implementation
Results
Market
Response
Implementation
3
Business Model /
Business Case
5
Market
Response
Implementation
Business Model /
Business Case
Idea v2.0
5
Results
5
Market
Response
Results
The Lab
Retire Idea
Reflect
Observe
Incubate
Etc..
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
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27. The Role of Metrics
1
The market response is where value is unlocked
from the implementation of great ideas….
2
1
Idea
3
Business Model /
Business Case
2
3
5
Implementation
5
Market
Response
Results
So that we can implement in a way that
generates the optimal response
To monetize optimally, we need to be clear
about the drivers of results in the marketplace
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
27

28. Applying Data to Dollars™ Techniques and Methods
Answering the question: how do I get from each step to the next?
2
1
Idea
3
Business Model /
Business Case
From Idea to Business Model
1. Causal Modeling
2. System Modeling
3. KPI Definition
4. Measurement
+ Analysis Plan
5
Implementation
From Business Model to
Implementation
1. People
2. Processes
3. Tools
4. Measurement
5. Decisions
5
Market
Response
Results
From Implementation to
Market Response
1. Response measurement
2. Root cause analysis
3. Improvement
Opportunities
4. Emergent Questions
There are multiple techniques in each of the categories above. In the rest of the workshop we will
be looking at each of them and how they relate to monetizing your innovative ideas.
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
28

29. Key concepts in the D2D™ Goal Setting Methodology
Concept:
Meaning:
1. Causal clarity
Cause
Effect
2. Causal model
 Precise definition of cause + effect
 Easy to explain
 “What drives results?”
Price
Revenue
Txns
3. Point of opportunity
 Based on causal clarity
 An opportunity for improvement
(decision, business process)
 Impacts drivers of results
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
29

30. Table of Contents
1. Introduction
2. The Challenge of Monetizing Innovation
3. The Data to Dollars™ Approach
4. Examples + live cases (will be presented live)
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
30

31. Delos Living: The Idea
Delos’ central aim is to create and transform buildings
to meet the highest standards of healthy living,
marshaling the most promising medical research and
advancements in architecture, technology, and
design.
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
31

32. Delos Living: Business Model / Causal Model (from a building owners
perspective)
Analysis Drives
Recognition of +
Exploitation of
Opportunities to
Innovate
Additional $’s
per SQFT in
Rent
Additional
Revenue from
WELL™
Revenue
Cost of Well™
installation in
$/SQFT
Base $/ SQFT
(Rent or Sale)
Profit
Overhead
Your
opportunity
Other
Expenses
Marketing
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
32

33. Delos Living: From the perspective of the occupant
Space
Comfort
Air Quality
Health
Happiness
Security
Standard Buy
Cost
Fixed
WELL™
Premium
Cost
Challenge / Opportunity
REcurring
Potential Solution
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
33

34. Delos Living: Implementation - Key Drivers of Purchase Decisions
Additional $’s A
per SQFT in
Rent
Cost of Well™ 1
installation in
$/SQFT
Additional
Revenue from
WELL™
Revenue
Base $/ SQFT
(Rent or Sale)
Arbitrage
opportunity
Prove that
WELL™
makes a
difference.
Profit
Overhead
Other
Expenses
Challenge / Opportunity
Celebrity endorsements + Share of
Mind
Marketing
Potential Solution
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
34

35. Delos Living: Market Response
Delos Living News Reel
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
35

36. Delos Living: Results
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
36

37. Tesla Motors: The Idea
Create the best Car:
an Electric Car that is not just a viable
alternative to existing vehicles but is
actually in all ways better.
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
37

38. Tesla Motors: Business Model / Causal Model
# of Cars Sold
Revenue
Price of Car
Gross Profit
COGS
Profit
New Technology
Development
Other
Expenses
Battery
Technology
Overhead
Marketing
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
38

39. Tesla Motors: Challenges & Opportunities
Legend:
# of Cars Sold
Challenge / Opportunity
Revenue
Potential Solution
Price of Car
COGS
Gross Profit
Battery
Technology
Profit
New Technology
Development
Other
Expenses
Design
Marketing
the Value Prop
Overhead
Marketing
2
1
Idea
3
Business Model /
Business Case
4
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
39

40. Tesla Motors: Implementation - Key Drivers of Purchase Decisions
Batteries are notoriously bad stores of energy
and charging stations are rare and slow.
2
Range
B
Brand new electric power train + a
vast network of “Supercharging
Stations” that can charge in an hour
Design
Customer Decision
Criteria
Handling
Design
Challenge / Opportunity
Cost
A
Potential Solution
Excellence in Operational Efficiency
2
1
Idea
Price Point Matters to be
profitable and to ensure sales
1
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
40

41. Tesla Motors: Market Response
“TESLA Model S Takes The Tops Spot In Consumer Reports Car
Owner-Satisfaction Survey”
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
41

42. Tesla Motors: Results
Tesla’s Model S “outsold all models from other luxury brands
Porsche, Volvo, Lincoln, Land Rover and Jaguar during the first half
of the year in” California – USA Today
2
1
Idea
3
Business Model /
Business Case
5
Implementation
Great Ideas Need the Right Metrics to Flourish |© 2013 Fitzgerald Analytics, Inc. All Rights Reserved
5
Market
Response
Results
42