Strategyzer Webinar: Why Killing Ideas is Key in Innovation - June 9, 2021

Welcome, everybody. My name is Nick Kimovic and this is why Killing Ideas is key in innovation. The Strachapp. Thanks very much, Tenday. Tendai's limbering up and warming up for the session. We're super excited to have you all here. While we're waiting for people to join, can I ask you to let us know where you're calling from in the world? I'll just move over to this one so you can see why Killing Ideas is key in innovation. Yeah, and if you can let us know where you're calling from in the world, that would be fantastic. I'll get rid of my host one there. And while you're doing that, I'll also introduce who we've got joining us today on the session, by the way. Hello, everyone. We've got our very own Tendai Vicky, author of Pirates in the Navy and associate partner at Strategizer. So very happy to have him here. We've also got. Oh, actually, before we move on, Tendao, we haven't seen you for a couple of months on the show. Where have you been? What have you been doing?

I wanted to come, but y' all kicked me to the curb. Replace me with better authors, everything. Now, I've been. I've been. I've been moving country, so I'm doing geo arbitrage, if you want to call it that. I'm, like, relocating my family to Zimbabwe. I'm originally from Zimbabwe, so it'd be fun to kind of start basing myself here, see if I can do some great work in the place of my breath.

I'm glad you're back on the show. So it's great to have you and it's cool to see you, basically. And we've got Alex as well. Alex, author of the Invincible Company, founder and CEO of Strategizer. Alex, welcome as well. What have you been up to since the last strap chat?

Just hanging around in the mountains, doing some walks and stuff, Actually working. Nor did they.

Definitely check out Alex's Instagram stories for more on those as well. And I'm very, very pleased as well to say that our special guest on the show this month is Uwe Kirchner from Bosch, who's the vice president for Bosch Management Consulting and also partner for Business Model Innovation. So, Uwe, welcome to the show. Great to have you.

Thank you, Nick. Thank you. It's a pleasure being here. So thanks for the invite.

No, no, absolutely fantastic. So, and then you've got myself, I'm the host on the show. Hi, everybody. Great to see You. Let's go back a second so we can see. We've got people from all over. Who have we got? Where are people calling from? Tenda, who can you see?

Hawaii, South Africa.

I can see someone from Pretoria. That's very close to where I am. London town. Is that like in the UK or.

So what surprises me, you know, we are from Asia because it's in the middle of the night there.

Right. Anybody? Manila, Philippines? Mexico.

Well, I've been there recently. Very nice city, very exotic.

Actually the first time I went to Germany, that's where I went.

Frankfurt also nice.

Brilliant.

South Dakota.

Now that's super cool. That's something I haven't seen in a while.

Just mention as well we've got the Strategizer series. So we've got all these books in the series. Definitely check them out. Let us know which one's your favorite in the chat as well while we're going along. Difficult to choose. I think that's a hard to pick a favorite. Oh, and I'll mention just before we do go on that don't forget to sign up for the newsletter if you haven't already on the website. So that's a good way to keep in touch with us. And I'll mention back here as well. It's good to check out the to get notified about future webinars by going to strategizer.comwebinars now we want to make this session kind of as engaging as possible. And one way that we like to do that is through using mentimeter. So if you could grab your phones, you can scan the QR code or you can just use the number 153661 when you go to menti.com and I want to kick off with a question. Welcome to those that have just joined, by the way. But we're going to kick off with a question. So why is it so difficult to kill your business ideas and projects early when necessary? What are your thoughts on that one, Uwe?

Well, you might be afraid that you're killing the wrong ideas. Right. Or it's always the expectation that this wonderful idea will turn into this well known unicorn and it's just a question of time, better work or more investment, right?

Absolutely, absolutely. And we can see we're getting some answers in here already.

So people are asking for the QR code again.

Oh, they're asking for the QR code. No worries. We can, we can do that. So there we go. There's the QR code. 1536 6116.com I think we can.

And the code, if you show the results, the code is on top, Right?

Ah, that's a good point as well.

Yeah.

So I like Steve Blank's quote when he likes to say that, you know, there's a fine line between vision and hallucination. Unfortunately, too few people, you know, test their vision. I used to have a co founder, he said, you have a vision, go to the doctor. I'd say, you know, you have a vision. You know, buy testing business ideas, book and start testing.

Okay, so let's see what we've got here. So you're personally too invested. FOMO attachment, fear when CEO ideas or CEO is the CEO's idea.

So it's a good one.

Definitely. By definition, then.

Yeah, by definition.

So nobody tells the CEO your baby's ugly. I mean, that's.

Someone just said they're not used to it. Falling in love with your babies. That's exactly what you're saying, Alex, right?

Yeah.

Well, not exactly, but related to the babies.

Nobody thinks their babies ugly.

Yeah.

Nick, you need to pin your vid so we can see what you're sharing. Because we. Every time you Alex, talks, it switches to oh, yeah.

What you need to do is do that, like individually when you're watching it. I think you can pin it. I don't think I'm able to pin it myself.

Right there, am I? Yes, you are, but I've just pinned you.

So, okay, otherwise if you just click pin, if you're watching, that way you can see all of us. What other ones have we got here?

Ego time.

Ego. My baby pet projects. So super interesting already. We've got some good answers. Fantastic. Right? I'm going to missing KPIs.

I like that one as well.

Yeah, yeah, that's true.

I remember you uwe telling me, right, that sometimes teams, you know, they don't want to test their ideas because they actually already kind of know that they might not survive.

Today.

Teams have a suspicion it's not going to work.

Right.

But let's just keep it going because eventually it's going to work. Right?

Exactly. Because I love this idea. And just maybe more work, spending more time on it will. Will make it successful. And we all know it's unfortunately, in many, many cases not true.

Brilliant. And I've just seen a question as well. If the slides are going to be available. We're not going to share the slides, but the video will be available on YouTube afterwards, so you can see it there if there's anything that you've missed that you want to check out. Just for those that have just joined the call, I should do a quick because I know we started a little bit early. Just a quick introduction. We've got Tendai joining us, which is fantastic. We've got Alex as well, Uwe and myself. So we're looking forward to getting into this session and in terms of what we'll be doing, five main parts. We're following a similar format to the last few webinars that we've done. So first of all we're going into the context of why kill ideas? Why is it important? Tendai is going to talk us through that. Then what we'll do is we'll go through the Invincible Company of the month. So we're really happy to have Bosch here or Uwe talking on behalf of Bosh, going through the example there, which is brilliant. We're going to create some controversy. I can see that Tendaya is in particularly cantankerous mood today, so. And I think Alex is as well. So that's going to be a lot of fun. And we'll go through a reflective part of the session as well, where we can think about our own perspectives and see how we can apply some of this stuff to ourselves. And then lastly we'll look beyond killing ideas as well. So that's the plan for the session. Before we get into it, I just want to mention that we've got a very cool pitch event. Alex, do you want to just mention very briefly what this is about?

Yeah. So we launched a coach assessment center where we test our best coaches and they accompany 10 startup teams through the Discovery Sprint. So those teams are all going to present not just their idea, but the evidence that supports the idea at this pitch session. And we're going to have a little panel tennis part of that panel as well. We're going to have investors watching in. So if you want to know how to do a world class evidence based presentation, this is where you're going to find it.

That's a good pitch for the pitch event. And then we've got the Building Invincible Companies virtual masterclass that is going to be from the 6th to the 8th of July. If you'd like to join that, you can go on the website and you can use the code that we've got on top of this slide. I'll present, I'll show the code as well at the end of the webinar and we'll also share it in the email afterwards. But. Or you can just jot it down now as well. So yeah, that's going to be really brilliant. And yeah, check that one out, too. Now I'm going to hand over to Tenday to talk about why kill ideas, you know?

All right, cool. Awesome. Thank you, Nick. My sharing is working, right? You can see my slides.

Yep.

Awesome. Awesome. Okay, cool. So welcome, everybody. And we're going to have a conversation today about killing ideas. And I think that every single one of the sort of responses we saw and why it's so difficult to kill ideas really speaks to the level of commitment people have when they get their one good idea. And I think one of the challenges we have in the world, and I think even it is the way people are educated in school. You can never submit 12 essays and have the teacher pick your best one and then grade you on that one. We always have to be putting our best foot forward everywhere we go. And so people start getting committed to things and trying to prove that they're very good at coming up with things at the first time. But in the world of ideas, innovation, creativity, the one thing that we know for sure, the principle that's like universal, is that the only way to ever discover something great, the only way to get a better idea, is to actually have a lot of ideas. Now, what that means when you're actually having lots of ideas, it means that those ideas are actually going to get a lot of those ideas are going to have to die and then something great is actually going to have to emerge from that. And when we're talking about ideas here, right, we're not talking about the same thing as an idea competition. One of Alex's favorite pet peeves. We're not talking about, like, have loads of ideas in an idea competition, have people vote, and then that becomes a good idea. We're talking about good ideas that are great in terms of the evidence of how the world responds to them, value propositions that resonate with customers and business models that work. The best way to find good ideas is to actually have loads of ideas and then throw away the bad ones. So I just want to give you a couple of examples of that just from the world of, like, people's creative endeavors. So Maya Angelou has got a really famous poem called Still I Rise. This is such a great poem. Like, she is so well known that even Lewis Hamilton has got it tagged on the back of his helmet whenever he eats, driving his car. And it's really about, you know, if you push me down, no matter what happens, when life is hard, still I rise, right? But what's actually interesting about this Is that in order to get this, like, one really great classic poem, Maya Angelou had to write like, 165 of them. And so, you know, out of this 165 poems, you get really one great idea emerging from there. Right. I mean, she's got a lot of other great stuff, but still arises is one of her classic poems. And then another one that's also interesting is from the world of classical music, Alex's favorite genre. So the London Philharmonic Orchestra did this really great exercise where they ranked the top 50 classical pieces of all time. And so they kind of put all these, like, this really great top 50. And I think number one there, you can see Beethoven's symphony number five in C minor. But actually what happened was all the great classical sort of composers, like Mozart had six in the top 50, Beethoven had five in the top 50, and Bach had only three in the top 50. So the question that we have for you, and please type your answer in chat because that's what we want to sort of see. How many pieces do you think that Mozart had to write in order to end up with just six in the top 50? Greatest of all time? Like, how many?

Oh, wow, the numbers are coming through. Almost 3,000.

You can see all the responses coming through like gunfire. Right. All right, so the answer is over 650. So votes are there to write over 600. 600 of these.

Someone says 600.

That's really great. Send that person the invincible company of the prize. That's so Precise.

Someone says 627.

627.

I'm trying to find if someone actually said 650.

Yeah, and I love that response that says Bach used to compose at least one piece per week. Because for Bach to end up with just three in the top 50, he wrote over 1,000 pieces. And so this really illustrates the point that in order to get really great ideas, you have to be constantly working and producing. And one of the things that musicians hate is when someone tells them, go to studio tonight and write me a number one hit. Like, that's not how that works. Like, you got to write loads of songs and then pick something that actually really sounds. Really.

Someone actually said 650? Christoph said 650.

Yeah. Tag Christoph's name. And then what's interesting as well is like, Hamilton hit the highest conversion rate. Yeah, exactly. Because he was a genius. Right. So that's really cool. People are sort of sharing really great comments there. So the final thing that you want to talk about is Shakespeare. Shakespeare. We know, like, a few of his great plays. But he wrote several hundred pieces of just like, you know, sonnets and plays. But this is really interesting. Like in the 15 year period where Shakespeare was really prolific and writing some of his great plays, in that five year period, he wrote Othello, he wrote King Lear, and he wrote Macbeth. Right within that sort of five year period. And then these are some of the greatest plays that he ever wrote. But mixed in amongst those three great classical pieces that he wrote, he also wrote like his worst ever plays, like All's well that Ends well and Tim and of Athens. Right. Like he wrote his worst plays. Right in between writing his best plays. So this really just illustrates the point that the best way to find really great ideas is to sort of just keep working and sort of producing really wonderful ideas. But before I leave you, I'm going to leave you with a thought before I hand you back to Nick and for Alex and Uber to take over. If we accept the principle that the best way to find good ideas is to have great ideas, the question then becomes, how do you make decisions about what fails and what carries on? And that's really what matters going forward? So thank you, Nick, over back to the invincible company of the month. And over to you.

Fantastic. No, this is great. And we're really excited. Thank you very much, Tendayi, for setting the scene, setting the context on that one, for sure. Oh, and by the way, I was just thinking. I knew. Alex, is there anything you want to tag onto that as well? Because I know that you had some opinions on this as well.

Yes. So Denda and I kind of always get in an argument when we talk about ideas, because I like to say, well, ideas are free, they're everywhere. But on principle, we're aligned. In business, it's not the ideas that matter. It's not the ideas that are hard. They're everywhere. What's hard is to turn ideas into value propositions and business models. And that's actually the testing.

Right.

So in principle, we're aligned, but I wouldn't use the word ideas. And the reason is very simple because I sometimes fear it's misleading. And I see these companies getting excited about idea competitions. That's the worst thing you can do. Oh, if we just get that right idea, we're going to succeed. So I sometimes get a little bit excited when I hear the word idea, because ideas are everywhere. I've never seen a company with a lack of ideas.

It doesn't exist.

The challenge is to turn ideas into value propositions and business models. But 10 nine are aligned. It's just a question of words.

And you like the idea of projects, and you said that all those examples, those were things that were shipped. They weren't just.

It's that idea that you ship it. I think that's the right way to frame it. You put it out there. And you can't be the judge of success. Right. It's always the user, customer, consumer. That is, you know, judge and jury and executioner at the same time.

Time.

So it's really that part of shipping an idea in terms of something real. So it's not. Technically, it's not an idea anymore.

Perfect. Perfect. I'm glad we got that in there as well. So that was important because we'll move on now to the Invincible Company of the Month. And it's an absolute pleasure and an honor to be awarding that to Bosch this month for the fantastic work they've done. I know many people absolutely love the Bosch case study in the Invincible Company book as well. So it's an absolute honor to have you on the call to go through this. So I'll let you take over and share your screen with us.

Yeah. Thank you. Thank you, Nick, for giving us the opportunity to present our case. It's my pleasure to represent Bosch in your session today. So I guess you can see my slide, right?

Yes.

So, yeah, let's start with the Invincible Company, the book itself. So for those. And I just say it right away, I haven't been asked to say, but it's really my inner, I believe, to share that conviction to you guys. So if you haven't had the chance to buy the book, Invincible Company, I really urge you, buy a copy. Not because Bosch is in. That's not the reason by any means. The reason is, it's really, I would say, a current compendium. It's a must read for those who want to engage more in innovation and. Well, Alex, I would say you should have published that book already, like, five, six, seven years ago, because then our learning curve wouldn't have been even steeper.

We didn't know it. We had to fail ourselves first. We learned all this. Thanks for the kind words about our work.

We had to. Right? So what you can see here, and that's the reason why I'm showing you that building here. It's our research center of Bosch in Reningen Renningen, for those who are not, you know, don't know, the south of Germany. It's very close to Stuttgart. And also this building is. Then the campus is very close to our headquarter which also in Stuttgart area. Now I'm showing you that building because it represents the past and also the future of our company. Because Bosch has had and that's my inner conviction and will have a very strong focus on technology and product development. And I would say our organization has been also recently successful in recent decades. But in 2015 I think it was also by then already when we've had first contact to Alex and his team, we knew first of all that there is the need to also be to go beyond product and technology development. And our board of management decided to set up a competence center which had a task to focus on business model innovation. So we already started back in 2015 with the topic now already back then we knew that whatever innovation projects and maybe we have an opportunity to talk about an innovation process and the need of an innovation process. We also had a podcast around this the other day. But a very important piece of any innovation activity in a corporate environment is, is certainly the structured validation of innovation ideas. Today we would say we need to have a fast structured and capital efficient. And I also saw it in the chat. Yes, using also the right KPIs, using also the right mix of methodologies in order to systematically validate your ideas. Now let's interact with the participants again. Nick, I think it's your turn now. So I give you a precise number. Looking back during the last three years we have been validating a certain number of innovation projects. And those who have exited our program, it's called Bosch Accelerator program phase one and two. So after the successful validation, they entered what we call the so called incubation phase. And now the question to you guys, what do you believe? In order to initially successfully validate 19 businesses, how many innovation ideas entered our Bosch Accelerator program? Our validation engine? Answer one would be 19, 243, 3108 ideas or projects. You could say 4214 or 5926.

So let's give people five more seconds and then I'll share the results.

I like the ones who are going to say 19, right? We put 19 in and we got 19 out. That would be nice, right? If we could do that.

It's just a question of efficiency. I would say.

The Bosch CFO asked, well, why do we have more than 19, right? We should kill.

So we've got the answers. And they've actually said to 214 was the most popular result.

So. Well, I have a, I have a theory here. I have a hypothesis behind. I think the majority of the participants has already had the opportunity to read the book, Alex. That's correct. Exactly. So let's go through the numbers. Yeah. So indeed we started with 214 innovation projects entering our Bosch accelerator program. A couple of explanations. First of all, our phase one only has a duration of three months. This includes also the preparation time. The average budget we provide to innovation team, and this very important includes already salary and travel expenses, is just on average €120,000. So there is this myth. In order to be successful in an early phase of your innovation activities, you need to spend lots of resources and lots of money. And that's not true. So I would say €120,000 on average is quite a lean approach. As I said, if you even consider the salary, which is included in here. So that's a lean approach. And now the question is, how did that continue? What happened to the teams after three months? You can see it here. So after those three months, we have killed is now stipulated on the slide. I come back to this in a second. 65% of all ideas now. Killing ideas. Maybe it's not the best term, Alex, in. In business. So how do you always phrase it?

So I like to say retire. But I talked to a CEO two weeks ago of a big financial institution, 45,000 employees, and he said, look at our bank, we don't kill anything. So I said, okay, well, let's frame it differently. How many projects do you invest in? So either we use retire or shelf the project. Even better. What's the fraction you invest in?

It was me that changed the word to kill just to meet the kind of the name of the webinar. Right?

Yeah. So that was the trick. So what at Bosch, we also don't kill. Certainly not. So what we do, we say we successfully invalidate or successfully terminate innovation project. And I believe that's the right approach. And let me also share something very, very important right here. What we also do is we ask the teams, based, I say it again on clear criteria, whether they believe the innovation idea should continue in phase two, or whether the innovation project should be terminated right away. And with that we are convinced, and we also have seen, that we are driving a cultural change, so it's no longer an idea competition towards the senior executives and just showing the good results. It's not. That's why we also call it a lessons learned session instead of a pitch session. So it's very important to really empower your associates and that they come with the right conclusion and the right proposals. Now back to the numbers. So if you take those 214 ideas minus 65%, that leads to 74 teams. These are real numbers, so no fake numbers here, real numbers from bosch. And those 74 teams then jumped on the so called phase two of our Bosch accelerator program. And phase two now has a duration on average of six months. And also, by the way, only during phase two, we start with the development and iteration of the so called MVP minimal viable product. And again, we just spent on average per team, €300,000. This also includes again, personal travel cost and MVP development costs. And it's again, as you can see, a very capital efficient approach to identify those projects which really have potential to scale. And at the end of phase two, the same happened as explained at the end of phase one. So we have a lessons learned presentation. We asked the innovation teams again to declare whether they believe the idea should be continued. And as you can see, again, roughly 74 ideas are successfully terminated, which leads then to those 19 innovation projects which entered the phase three, or as we would say, following the Bosch innovation framework. And then they entered into the incubation phase. And they are there to grow and to show that they really can show the growth in turnover and profitability we expect. For example, they need to fit strategically still. They also need to address the right customer segments, the market potential needs to be right, and many other ideas and criteria which determine whether an idea really incubates and later on scales within our company. I wanted to, before I come to the end. So, first of all, two very important remarks. So the success rate at Bosch and looking out there in the real world, and this is true for corporations and also individual startups, the success rate also here in our company is below 10%. That's right. That's correct. So you need to allow that you have to invest in many, many ideas. You need to accept that many, many ideas won't be successful. And in order to have those projects will emerge the winners that emerge, you need to accept that you need to invest the vast majority of all innovation projects. And the second remark, and then I'm coming already to the end, and we are open to all your questions. It's very important that we at Bosch, and this is also true in many, many corporations, many do a portfolio analysis, a portfolio management of the existing core businesses. But and this is also again stipulated in Alex's book, which we very much appreciate, because he's also clearly pointing out that successful organizations actually do both a portfolio management for your existing core businesses and simultaneously also a portfolio management for your New venture, the so called explorative businesses. So you need to do both because it's clear your explore business will come. Some of them will come part of your future core business. And a last comment before we are open to your question. So should you be interested to get more details about our program, just reach out to me. So gentlemen, now we are open to questions, right?

Yeah, yeah, absolutely. I don't know. Alex Tendar, do you want to say something first?

Just a quick one. So in the chat people were asking, you know, what's the average size of the team maybe in phase one, phase two? And just so they understand a little bit.

Right, That's a very good question.

Was including salaries, what's the average size team?

So we ask the teams to set up at least 3 to 4 capacities on average. We have 3.5 capacities in phase one and we have 4 capacities in phase two. And that's also I think a no brainer in these days. So innovation is not a part time activity. I think Alex, you would also say that. So we really ask the teams not to start on a Friday afternoon, to really start Monday morning with the innovation idea and to really do it seriously. And then I say it again, winners will emerge over time.

Yeah, I think the thing that struck me is Alex, every time we go to work with large industrial companies that are making physical products, they're like, oh, you can't just spend 100 grand in phase one. And here we have Bosch, right? They're like that 120,000 also includes salaries. So we're like, what? Like how is that even possible when people are working on creating, you know, amazing technologies in the way that I.

Guess the trick is to sort out what to do during phase one Tendai and during phase two. And today in our company it is well known that you don't need to invest any money in product or technology development. In phase one, you may consider, you may check whether there is an existing technology which you may apply for your business idea. Certainly given and I also said, I also believe we will differentiate in the future by having superior technology and products. Sure. But the trick is really and again, use the Osterwalder Alex tools and team tools, for example, the business model canvas. And as you know, start with the customer segment or with the value proposition and make sure that you really, as we would phrase it, that you are addressing a must have problem. And we also know that the vast mass maturity. You also may ask what are the reasons why you are terminating so many ideas after such a short period of Time. Well, these are the reason you find everywhere in the world. The reason are for example that the startup idea that the innovation team is not able to address a so called must have problem and or they're not able to address or to build a value proposition which is strong enough or relevant enough for your target customers.

One question I'm seeing. Well, there's plenty of good questions coming up in the chat. One that I wanted to hear, which I think will be easy for you to talk about, especially because you had it on your slide, which is, is it just internal employees or is it external as well?

Well, that's a very good question. So we have had some external ones, but usually our responsibility is how we would phrase it to generate external facing business, meaning we are working with Bosch associates, Bosch professionals. We help them to successfully validate their idea. And the trick is we can also teach all our associates, also those who have not engaged in the past with the context of business model innovation, maybe those couples maybe just who haven't had an opportunity to read e.g. alex books in the past. So we've had the opportunity to do so and therefore it's quite easy to explain to our associates what they should do. So seriously, only just internal associates.

I think we're gonna have to invite Uwe a couple of times and very, very good. How you mentioned our work. Just one quick comment. Right. People were asking, well, how do you know? Goes from phase one to two, it's evidence based, right? So looked at the evidence, not oh, how good is the spreadsheet, how good is the PowerPoint? And you used this amazing quote that I business leader idea, something you said. I love that one. And it's not about that, it's about the evidence.

Right, exactly. So it's about quite, it's bringing, it's about evidence. You also know it's about going out that I think this is well known from the lean startup and design thinking approach. You need to define your hypotheses, your leap of faith assumptions, what are the most critical ones. As I said, start with the value proposition always or the customer segment or the other way around, vice versa, and then define your hypotheses, find out how to validate your typical hypotheses and then go out there. That's just, it's that easy. So I would say more and more the theoretical knowledge is out there. How innovation teams should work. What is missing in these days is the consequent implementation and a framework like ours, the Bosch innovation framework and maybe even a program like the Bosch Accelerator Program, help the teams to really stick to the curriculum, stick to the criteria, and to really reach this high quality.

So what's the criteria after phase one? Can you give a couple more, even.

More specific points after phase one or at the end of phase one?

At the end of phase one, it's.

Really about the customer need, as I already said. Is there a clear customer need? Do you have a convincing value proposition? Very important and Alex just mentioned it. It's also a question around strategic opportunity. There are some organization maybe who can afford to work on any idea. We believe you also, and that's what we have in our Bosch innovation framework. We start with the strategic framing, meaning as an innovation team, you need to make sure that your idea strategically fits to the ambitions of your organizations. But be cautious here. The ambitions, of course, should go beyond your existing core businesses. You need to have good strategies, good ambitions, and based on that, you need to make sure that this idea fits to your strategic ambitions of the respective unit. Another very important criteria, for example, is the market size needs to be big enough. Although you don't know yet, maybe at what price, certainly you will sell your solution. You can still estimate, is this a rather small market or will this be a bigger market? Because typically mid sized large organizations, they are not addressing a market which has maybe just a potential of 30 million or so, which might be just too small. But this is an individual decision and always also the question whether it is a repeatable and scalable business. So for example, at Bosch we are not looking for individual project businesses, we are really looking for repeatable businesses. So we are looking for many cars, people, whatever, so that we can produce our products and services. Not 10 times, at best, millions of times.

Brilliant. Thank you very much. I think we've got maybe time for one more question. Alex, have you got any. What? Should we ask one last one?

No, I think maybe just that the one question that came up a lot is that fund size, Right. So if you do the math, they were saying, oh, you know, this amount of money, that seems like a lot. But then if you look at the size of Bosch and we're talking about the future of an organization like it's a drop in the ocean, right? So this is still very small compared to your general R and D budget. So maybe just some quick words in terms of. But this is not a lot if you want to a certain extent.

No, definitely. Exactly. So I remember Alex, just recently with the two of us, we had a discussion around R and D budget, where the spending on innovation and if you look into the budgets of many corporations and Bosch is also not an exception. The R and D budgets are huge. They are big. Yeah. And this is a very lean approach. And I would say, I wouldn't say it's a drop in the ocean, it's still a lot of money, certainly, but it's still very capital efficient. Because you also need to ask the question, what's the alternative? The alternative is maybe just let go and just try out things. And then typically, organizations tend to develop stuff, they do products, they develop software solutions. And I tell you, this is going to be way more expensive than these couple of 100,000 we have here on the slide.

And maybe just to add for people who are listening in, if you're a smaller organization, you scale down the numbers, right? So if you're the size of Bosch, you need to have bigger numbers because you're expecting bigger returns. So the same thing actually applies for small or medium sized company. When you make 10 million or 100 million euro in revenue, it's just a different number. It might be five to 10 projects. So the bigger return you expect, the more you need to put in, you get out of it what you put in. It's very simple.

Yeah, exactly. But even if you're small and take the math, so you can be as small as you wish to be, but considering the success rate, which is below, I repeat, 10%, well, do the math. If you start with three innovation projects, will you see an innovation project at the end of the funnel? Well, maybe, but probably not. You need more ideas.

Brilliant. Thank you so much.

If you start with three ideas, you have a tunnel, not a funnel. That's a good point.

That's so tweetable. You got it. That's so tweetable. Thanks, Tenday and Uwe. You can stop sharing your screen now. I just want to say thanks again. Thanks for being our Invincible Company of the Month. So massive round of applause to you. Congratulations. This month, Invincible Company of the Month. That's it. Congratulations. So I'm going to share my screen. We're going to be doing one of my favorite parts of the session and the bit that Tendai and Alex have been limbering up for an Uber as well because he's gonna be joining us for this, which is the hot or not. Yes. So if I can ask you to get your phones out again, scan the QR code or just open up. I think if you just open up your phone, if you already were part of it, that would be good. We're going to go through Hot or not. And we've got a few questions, so let's see what this looks like. I'm going to move along here. So the first one Alex actually mentioned, this one, which is this idea of idea competitions. So hot or not? Are these. Alex, you can't wait for this one. Alex, is this hot or not?

It's the biggest waste of money in the, you know, since the beginning of innovation, I think, because ideas are free, they're cheap, they're everywhere getting, you know, people to make an idea competition. And then internal employees vote on who has the best idea. It's just, you know, you're working in a bubble. So I'm not a fan, I'm not a fan. And I think a lot of money has been wasted with this. And then picking one idea and going to execute, that's when the waste of money gets even bigger. Write a business plan, you execute an idea that looks great, that everybody in the company believes in and the market says this is bullshit. So I hate idea companies.

So it's a not from Alex Tenday. And if we could try and keep it under 30 seconds, each of us on these, by the way, Alex got a bit heated there.

So my response is lukewarm. It's not hot, but it's not hot. So my response is like a little bit lukewarm. So me and Alex debate about this all the time. I don't think it's the biggest waste of money ever like that. Right. But I think that the way that what people do after they've generated the ideas, that's where the money gets actually wasted. So you could actually design this to work in a much more effective way than what people do right now. And so that's, that's probably like my nuanced response to that. But, you know, nuances don't work. But you need to be tutable.

So.

I'll give you half a point for that. You give half a point for nuance.

Okay. And Uwe, what would you say, would you say?

I would say, alex, I have an idea. And tender. I have an idea to make it even worse. Yeah. And you bring in senior executives.

All right.

Because they should know. Right, Exactly.

Which is the best idea of the hundreds that have been proposed.

Exactly. Because they're the senior executives, so they know best how the future will look like, particularly for businesses outside the existing core. So definitely what you get at the audience is getting it. We are joking. I Kelly. So but it's still on. So it's when you go out there, you still find it. So I'M glad you're bringing it up today. And it's, well, it's so cold, it couldn't be cold.

This idea, that's my take.

So the next one is using venture capital style investments. So learning from the venture capital world and bringing that into the corporate innovation world, is that hot or not? Uber, let's start with you this time.

Well, this time what I tell you, when we developed our Bosch innovation framework, of course we also have had a look at which criteria are venture capitalists looking in order to decide whether the innovation idea gets additional funding or not. So this idea I like is still very much what is important. You need to work on the right criteria and also very important difference. Corporate context or venture capitalists. We as a corporation, our target is not to have an exit of one unicorn and forget about all the rest of 95% which are not successful. So we need to right away have a very efficient way to validate and further incubate our ideas. That's my take.

Alex, this time.

Yeah, look, I use the data from venture capital a lot because even the best venture funds can't pick the winner, right? So it's very clear that if this is your profession, you can't pick the winner. Guess what? There's something to learn from. So you might not have implemented one one because it is slightly different in corporate innovation, but definitely there's a ton to learn. So absolutely hot on the nice.

And tendai.

Yeah, I'm also hot with the nuanced qualifier that the problem with most companies is that you have like the one vc. You know how like if you're a startup you get like multiple VPs who are like, you know, investing in your idea inside a large company, you're working with the same vc, like continuously going to the same source for money. So then, you know, there's challenges around that, which is, you know, there can be biases and of course leaders will always have heavy opinions on that. But if you structure well in the sense that decisions are made based on evidence, it becomes even more important that decisions are made on evidence when you have one vc. So. So yeah, that's good.

Did you mention that in your book? Is that in your book, that point.

That one VC thing?

Yeah, that point.

I don't know. All my books are ghostwritten.

That's definitely a blog post.

It's not true. Okay, last one. And I think the audience agreed with you as well. So hot or not 20%. So like Google Time employees can spend 20% of their time on innovation. Tendai, go on jump straight in.

I mean you might as well call it 120%. Tara. This is when people start like working on Friday, like with Uber, let's say like Friday afternoon. And then so yeah, I mean this is the most frustrating piece of the work that we do where people are, leaders are saying they want to invest in innovation and they're like okay, cool, give up the team. Like wow. Just make sure that they only spend one day a week on the ideas. Like okay, well you haven't really given us a team, right. And so I mean one of the things that we see investors do all the time when teams are pitching ideas is if the team still has a full time job while working on their startup, the venture capitalist is not giving them any money. But we do this inside large companies. And so this is just, it's not.

Hot, it's frozen, it's frozen. Uwe gone.

Well, I couldn't agree more. But there's always, I still say there's this tendency. So we've been also in contact with other corporations and we've seen it. So there's on one hand side there is this need, the urge, the dream. Well, we're going to be successful, we're going to create these lovely unicorns. But we do this on a Friday afternoon because we have more serious stuff Monday after Friday morning. And what we are doing in our program just maybe also for the audience as an idea, we just don't accept innovation projects which don't have sufficient resources.

So I'm going to shock everybody and say I love 20% for phase one. Okay. And actually Roberto Hortal said the same thing here. So what I like to, you know, getting back to that co meeting I had last two weeks ago, I said look, you want to take down the hurdles, the entry points for people to start, so ask them to do it with 20% of their time. But then immediately you need to scale up the time. What I'll calibrate here is 20% time is good for a very short amount of time so people can start so they can get some first evidence and then get follow up investment to immediately go to 100% because I think we need to take away the hurdles and 100% time already is the first hurdle which will keep teams from applying. So I actually like 20% time for maybe a month or a maximum three. So I'll be the shocker here and say hot.

But hold on, hold on, hold on, hold on. So how long will you go though? How long will you go? Will you go to 10%. Will you go to 5? Can I give you one?

No.

No.

Okay, good. 10. Now you're pushing me. Like, come on, you can't even make a business model canvas and design some experiments. So you need time to go and experiment. So I do think 40% would be my minimum. So 20% would probably be on the colder side. 40%, anybody should be allowed to start ideas and people fear too many are going to start. You will not have that problem. You need to take away the hurdles, get people started and then kill ideas. The better you're at killing ideas, the more ideas will get explored. So I actually like 40%, 60%. So thanks for that specification.

I like how we had some disagreement but everyone's still smiling, everyone's still friends, so that's good. I was a bit worried at the end of this one, so that was a good. So we're going to moving on to the killing ideas mini assessment. I'm going to share my screen the old fashioned way now and you can see we've got a few questions. So, Alex, do you want to take over the reins on this one? Well, I'll move the slides, but you want to take over the reins.

I was just going to react on the chat. Alex is never wrong. He never has bad ideas.

Wrong, wrong.

So many assessment is four questions to see how you're doing on innovation. And here are the first questions. You know, our leaders know that we need to invest in and kill many innovation projects to produce big winners. If you are on the strongly agree side, then you have a CEO who understands how innovation works. If you do not have that, your own strongly disagree. You shouldn't, you know, if you're working in innovation, you should flee that company because there is no, you know, place to be condemned to succeed. So I like this phrase and actually resonates with a lot of people. When you're condemned to succeed, you're not allowed to experiment and fail. You can't innovate. And Jeff Bezos is famous for saying to his investors at the annual shareholder meetings, we're the best place in the world to fail. Why would he say that? Doesn't mean that for the warehouses, no failure there. But in innovation, experimentation requires failure. So if you're in blue, strongly disagreeable, your innovation efforts are dead. Right. If you're in D, what Uwe talked about, you're on the right side. So that's for the first question. I see quite a few disagree. Right. So poor you guys, you need to change that and get us to talk to your CEO. So second one, we know which innovation projects to invest in and which ones to kill because we have an evidence based approach, evidence based metric. So what UVIT showed you, you know, or the teams know and you know, after phase one, which evidence needs to be shown. After phase two, which evidence needs to be shown. So this one I'd say is very advanced. Very few companies really do this well. So Google the innovation project scorecard. We're actually very explicit on how to do this. So I would have been surprised if a lot of you strongly agreed with this one because this is state of the art. What Bosch, what Uwe and the Bosch team are doing is really, really good stuff. So good to see that there are green ones and purple ones. So happy to see that. So this also gives you a little bit of an idea of your peers. Third one, our innovation teams know that they can explore and fail without negative career consequences. So they're not condemned to succeed, they're allowed to fail. And again, Jeff Bezos, right, We're the best place in the world to fail. Not when you build a warehouse, but when you experiment. And okay, a lot of you say agree. So that's good, that's good. Now I want to see that in reality, how that looks like. I'd like to talk to people and know if they're not doing, you know, any experiments because they don't want to jeopardize their career. So good. So a lot of you are allowed to fail, but we didn't say, you know, maybe with hundred thousand or a million or so. Okay, last one. Let's see if you're on the right hand side or on the left hand side. We have no big and costly lighthouse projects that continue to exist without evidence. They get killed. So again, I was talking to the CEO two weeks ago and we were talking about lighthouse projects because they don't yet have an evidence based approach. So if you have these and not everything's bad with lighthouse projects, but if you still have those and they're allowed to continue to exist after one year, two years with no evidence, you're definitely in the yellow. Tendai, quick question. Have you ever seen companies with lighthouse projects that should have been killed?

Do you know what I'm typing right now? I'm typing Alex is slaying all corporate sacred cows. Idea competitions, lighthouse projects, you kill it everything. But no, absolutely right. Like people say lighthouse projects and then because it's a lighthouse project, it's on top of the mountain and everyone's looking at it. So now it can fail even if it's not really producing results, we'll do whatever it takes to make sure that it looks like it's producing results. People feel inspired. So it's a. Yeah, there's nothing that should ever be called a lighthouse project on day one. It's only a lighthouse project when it's actually successful.

Those are, those are four big questions. Right. So, Umi, I'd be interested in your, in your point of view here because, you know, you're in a big corporation and again, not all lighthouse projects are bad, but I'm pretty sure this evidence based approach is kind of scary for a lot of the lot of the projects. Right?

Yeah. The trick is again, to bring all relevant innovation projects into that innovation funnel, what we call the Bosch innovation framework, and then the validation engine. Yeah. And you're right. I also have seen out there corporations which believe. Yes. So maybe for these little small, not so important innovation projects, we test this evidence based approach, but then we have these lovely ideas which typically also come from the senior executives. They are special by definition and they're going to be successful. We know, and therefore they are lighthouse projects immediately. Whereas we at Bosch, we've developed for example, an initiative where we do a systematic validation, maturity validation of innovation projects. And since we are a service department, we are typically independent from the divisions, from the respective units and they are looking forward to receiving an honest and direct feedback. Because as we all know, the truth is out there and eventually you can't hide that the innovation project won't be the unicorn. So at a certain point you either are producing the millions of turnover and hopefully also profit later, or not. And I would encourage everybody to be honest, to be brave and to really allow to really only scale in these innovation which really have the potential. Because otherwise it is at a certain point it's just embarrassing for everybody.

And there's a strategy for that, right. You change the job and you go into a different division and you say, oh, look, they screwed it up. We started out so well with our.

Until I was around, everything looked fine. Right.

When I was there, everything still looked fine.

Exactly.

And the paradox is, and I know I have to throw it back to Nick after, but the paradox is the bigger the projects, the more seriously they get taken. And that's the problem with innovation. Sometimes projects need to start small and then unfortunately they don't get taken seriously. But that's how innovation starts because you only scale up later on. So there's this paradox of size matters in corporations. The more budget, the more people, the more you're taken seriously and that leads to lighthouse projects of people look at those. So really the contrary what we want. Okay, Nick throwing it out.

Before Nick takes over, I just want to say this. I was once in a room where the leader was saying to the team, I only want 10x ideas. Don't come to me unless you have a 10x idea. Which is like, well, how do you know that from day one?

But anyway, that's the best way to constrain creativity. Okay, so we're going to move on to beyond killing ideas. What next? So I think again, Alex, I might pass this one over to you and talk a little bit about innovation ecosystem assessment.

So actually, you know, Tenda and I are going to just go back and forth a bit and maybe Tenda, you want to share your screen because I think we get into spotlight, right if Nick takes over. So one of the things that you want to keep in mind is this kind of approach that Uwe showed us about. This can only really survive if you work on your innovation ecosystem, right? So this needs to be really ingrained. You need to have the right culture, you need to have the right metrics, you need to have the leadership support. And without that, you can't really get anywhere. And Tenda, you've done a couple of these, so maybe you just want to share one or two insights before we wrap it up. Wait, can't hear you. So you're on mute.

Hashtag, you're on mute.

So.

And I think what you're saying is really, really fundamental, right? Which is we spoke about all these principles. You need to have loads of projects and then you need to kill those projects. But actually the only way you can do that is if you have an ecosystem that actually supportive of that happening. In the few companies where we started doing the work, we do the first step, which is we review their portfolio to make sure that they have ideas that cover the span of different types of innovation. We also look at the programs that they're running to make sure they're not engaging in innovation theater idea competitions. And then we also then assess their cultural readiness to see if they have the right leadership support, the right organizational design, and also the right innovation tools to make sure that they're working in the way we just described. Not only do you need to use these tools, but you also need to be in an environment where these tools can actually thrive and produce results. And that's what the ecosystem assessment is about.

Quick question to you, Tenday. When you've done these portfolio reviews, have you seen the Type of portfolio that Uwe just showed us. Or do you see something else? But I'm curious what you kind of see when you do these portfolio reviews.

Oh, no, it's all fun and games. I'm like, okay, let's put up your efficiency innovations, your sustaining innovation, then your transformational innovation. And they put like loads of stuff in transformational. And then you dive deep into the conversation, like, what is this transformational thing like? Well, we put a new movie system on our flights and we won an award for that. Well, the business model stayed the same, so that wasn't transformational. So we end up moving things backgrudgingly, putting things back to the efficiency innovation part. And what we're seeing is that people are just working on things they've always worked on and their portfolios are not balanced. Or we need to explore in the future.

And maybe Uwe, one question to you in your journey. If we take the cultural readiness, what is the most important factor that you've seen in terms of innovation culture that had to change at Bosch to kind of get to where you are today?

Well, very important is an alignment. First of all, how should innovation be done in a big corporation? Very important. Also what you also just pointed out, Tenday, a clear differentiation of the different innovation types which exist. So in these days at Bosch, we clearly differentiate between innovation in our existing core businesses and beyond. We also changed, for example, also our Innovation Awards. We have an Innovation Award, which is awarded by our CEO in front of the senior executives once a year. And to also demonstrate that we need to be active and successful in both in our existing core business and beyond. We are now awarding our Innovation Award in those two categories. So you need to drive awareness. And what you also slightly touched on, just Alex, is regarding how we would phrase it, organizational ambidexterity. You, you need to have the right organizational setup for teams, particularly when they enter the incubation phase, depending, as you know, on how close are they to the existing business, which targets should they have? What's the right approach to drive the future Access? What are the metrics that matter for these young innovation projects? I still believe these are very important topics which even come after a successful validation of numerous innovation ideas. And this is very important to also touch on that.

And the organizational structures are the biggest thing that need to change. Giving innovation power and then also making sure some innovation can live within the business units. But kind of breakthrough business, small innovation will get killed within the business unit. So you need to do both. So you need to keep it inside the business. But you also need outside the business with access, right to supply chain managers, expertise and intellectual property and customers. So lot to do there. I'm sure we're going to have some webinars on this in the future.

Oh yes, and I love what Ryan said. He was like step three is mega, mega. So that's pretty. What I've shared already is the poll. So if you haven't already, if you could let us know what you thought of the session, whether you'd be very disappointed, somewhat disappointed, not disappointed at all, or you wouldn't, wouldn't have wasted your time if you didn't attend the session. So let us know by voting on that if you haven't already. I also want to stress that we've got our wonderful virtual masterclass Building Invincible Companies that's going to be on the 6th to the 8th of July. I highly recommend checking that out and we've got a special discount code especially for you that you're seeing on screen now and we'll email to you afterwards as well. I highly recommend that you check that out. Alex, any comments on that one?

No, but if you like the book or you don't have the book, you have to join this one because we're going to share two decades of innovation experience. All the things that we did wrong and learned. You don't have to do those. So don't reinvent the wheel. Come to our masterclass.

Great. I think, Alex, you're sharing screen. So do you want to move forward whoever Tendai's sharing? We've also got an event that I mentioned at the beginning of the session which is not, it's, it's called not your typical startup pitch session. And Alex was saying before this is about evidence based pitches. And so you're going to see, I think in a way we're going to go into a little bit more of the nitty gritty of this stuff on that you're going to be seeing the actual pitches after the initial discovery sprint. So that's going to be super exciting. Make sure that you sign up on the website. You'll be able to find the not your typical startup pitch session and you'll be able to register for that. I highly recommend that you make it there and then Tenda, if you could go ahead as well. Thank you. We've got our next session which will be hosting, I'll be hosting it again. You've got Alex and Tenda joining me and it's what makes a good innovation coach. So if you want to get notified about that, when the registration page is up, just go to strategizer.comwebinars. you'll also be able to see the same link for the pitch event as well. So that's pretty much it. I want to say thank you to all of you for joining you joining us. It's been an absolute pleasure having you. What's your thought for the day, Alex, at the end of that, before we leave, people?

Congratulations, Uwe, for the great work you and Bosch have been doing so far.

And Tenday, what's your thought for the day?

Yeah, congratulations, Uwe. And Alex, you're on my list.

Uwe, have you got a thought for the day that we want to leave people with before we finish the session?

Yeah. Get started, as Alex pointed and pointed out. So get started. Don't waste time and energy. Just make it happen. And by joining the seminars, by reading the books, that's the way forward. We also did that and we are still reading a lot. And so they are still to improve. But there are also substantial learnings existing. And if you don't want to maybe repeat the mistakes which have been done by other organizations in the past, just start implementing them.

Fantastic.

Implementing the learnings, of course.

Thank you, everybody. We're going to finish it there and we look forward to seeing you very soon on another webinar soon. So see you later, everybody, and thank you all for joining. See you.

Thank you, everyone.