Panel 4 mary g davis

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