Unleashing Thoughtful Innovation at Scale — with Alex Osterwalder

Podcast Notes

In this episode, Simone Cicero is joined by a special co-host and former guest on the podcast — Bill Fischer — Professor of Innovation Management at IMD Business School in Lausanne.

Together they pick the brain of nobody less than Alex Osterwalder, whose work continues to influence the way established companies do business innovation and how new ventures get started. The inventor of the Business Model Canvas, Value Proposition Canvas, and Business Portfolio Map together with Yves Pigneur, Alex just released a new book called The Invincible Company, whose ideas are mentioned throughout the conversation.

Alex talks about why, in the furiously changing world of today, innovation portfolio management is a must, as well as transforming innovation into a pervasive process inside the organization: we also debate a lot on the several ways to do it.

We also talk about the responsibility of companies to become great workplaces — being able to keep and reallocate talent across business units — and serve society beyond shareholder interests. Enjoy this jam full episode!

Here are some important links from the conversation:

About Alex Osterwalder and his work:

• Alexander Osterwalder, Yves Pigneur, Alan Smith, Frederic Etiemble, The Invincible Company: https://www.amazon.com/Invincible-Company-Alexander-Osterwalder/dp/1119523966
• Strategyzer: https://www.strategyzer.com/

Other mentions and references:

• Rita McGrath, “Transient Advantage”, HBR, 06/2013: https://hbr.org/2013/06/transient-advantage
• Scott Anthony, “Breaking down the barriers to innovation”, HBR, 11/2019: https://hbr.org/2019/11/breaking-down-the-barriers-to-innovation
• Rita McGrath, Seeing around Corners, interview with Aperture: https://medium.com/aperture-hub/seeing-around-corners-19-ec64b2260337
• All Things Marketplaces with Dan Hockenmaier, Casey Winters, and Lenny Rachitsky, Village Global’s Venture Stories: https://podcasts.apple.com/us/podcast/all-things-marketplaces-dan-hockenmaier-casey-winters/id1316769266?i=1000467536947
• Companies mentioned in the conversation: Amazon, Ping An, W.L. Gore, Logitech, Kodak, Haier

Find out more about the show and the research at Boundaryless at: https://boundaryless.io/resources/podcast/

Thanks for the ad-hoc music to Liosound / Walter Mobilio find his portfolio here: www.platformdesigntoolkit.com/music

Recorded on May 11th 2020

Key Insights

1. Portfolio management — a key idea explored in Alex’s new book The Invincible Company — includes two main portfolio types: one to explore future directions and one to exploit and execute ideas in the present. What most organisations still need to figure out is how to empower people to innovate and create legitimate spaces in the organisation to explore new ideas on the one hand, and on the other hand having a process to sort out the ideas that get traction and incorporate them into the execution part of the business. The right level of integration between these two functions is the sweet spot that many companies still are trying to find. Like Alex says: “It’s about creating that giant incubator, that little Silicon Valley within, and at the same time being world class at execution”. Leaders, in the portfolio management context, need to provide “portfolio guidance”, a mix between art and science, where you’re constantly testing and adapting your ideas until it really makes sense.
In this process the role of distributed profit and loss and the idea to transform the organization in a dynamic entrepreneurial network migh constitute the next big shift out of bureaucratic thinking.

2. Related to portfolio management, there are different types of innovation that need to be in the mix: efficiency-innovation making business models and processes better, sustaining innovation, which is expanding about expanding existing business model with new value propositions, and more transformative innovation, inventing the future and creating entire new P&L or growth engines (think Amazon’s AWS). In order to unleash the potential of these levers, Alex ponders on the need to remove “innovation blockers”, like for example ex ante business plans through up on PPTs and spreadsheets.

3. While transformative innovation enabled through the organization can radically disrupt its structure, it does not need to cannibalise it and get rid of the people who have dedicated their careers to the “execution” side of the company. Instead, a more dynamic model is needed where talent is re-allocated across business units as the organisation evolves. Indeed, creating great workplaces that enable people to be their best — and to subscribe to the company’s wider purpose in society — is becoming an essential “layer”, following Alex’s words, building on top of user experience and growth.

? Boundaryless Conversations Podcast is about exploring the future of large scale organising by leveraging on technology, network effects and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.