Innovation Start‐ups inside Corporations Six Keys to Success Mary Graham Davis Davis Consulting Group LLC
WHY INTERNAL START UPS ? • Innovation for competitive advantage • Grow new business revenue • Given lifecycle of current products, corporate earnings may depend on new directions • “White Space” opportunities are ignored by managers focused on their current products
Six Keys to Success
1. DESCRIBE UNMET MARKET NEED
• Carefully articulate the product or service: data driven analytics • Assure you are NOT transgressing on another area’s “SPACE” • Prepare your argument for innovative revenue generation in the future
2. PREPARE A BUSINESS CASE • Financial pro‐forma [include REVENUE assumptions and capital required and breakeven ] • Articulate risks and rewards • Define talent needed for implementation • Fight and hold firm for investment dollars
3. LINE UP AND CULTIVATE SPONSORS • • • • •
Boss/Management Team members Marketing function Sales function Peers (particularly any LOB that might inherit the start up once launched) Finance
4. BUILD EXECUTION CAPABILITY • • •
Identify and fill key roles on team Set performance goals and delivery timeframes Lead with energy and commitment “JUST DO IT !!!!”
5. FOCUS ON REVENUE GENERATION • Be the chief client relationship person in the beta stage • Listen for product/service feedback • Create customers for the long term • Avoid complex sales transactions: “ KISS “
6. PLAN: START UP STAGE WILL END • • • •
You will “exit” this start up stage Unit may be absorbed by a LOB post launch Unit may not survive corporate rivalries for capital—therefore spin off or cease to exist Unit may grow to become a key corporate business segment “ with all rights and privileges”
CASE STUDIES • Financial Institution transaction services in healthcare provider arena: new leader fights for capital and talent • New Product Development/ Portfolio M&A In large pharmaceutical company: sponsorship challenges