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The document outlines an approach called the "Growth Operating System" (OS) for helping large enterprises grow like startups through a focus on discovery, experimentation, and learning. It advocates installing a "Growth Board" decision-making structure to manage a portfolio of growth opportunities from seed to launch to scale. The goal is to create a "Positioned Capital Portfolio" of new businesses estimated to generate billions in revenue by focusing on opportunities outside the existing addressable market and validating ideas through fast, low-cost experiments.
short version
- 1. THE GROWTH OPERATING SYSTEM WE IGNITE GROWTH REVOLUTIONS
- 2. BIONIC’S CONTRARIAN VIEW WE BELIEVE LARGE ENTERPRISES CAN GROW LIKE STARTUPS (VC + Entrepreneurship is a Form of Management)
- 3. GE 2012 Shareholder Letter 2013 HBR on Lean Enterprise “I have found two books—The Lean Startup and The Startup Playbook—to be particularly useful” (Jeff Immelt, CEO)
- 4. Grow @ Will Optimize @ Will NEW TO BIG BIG TO BIGGER ENTERPRISES HAVE SYSTEMATICALLY ERADICATED NEW TO BIG GROWTH CAPABILITIES VS Top Line: .01 = .10 (discovery to growth to scale) Bottom Line: .01 = .01 (efficiency + yield)
- 5. Rack + Stack ROI EXPENSIVE FAILURE Internal Success Theater TRUMPS CUSTOMERS Total Address Market Mindsets “KNOWABLE” RISK TAKING Intellectual Dishonesty TRUTHINESS Stakeless Stakeholders REVIEW HELL Focus on Can VS. SHOULD Answers vs Questions LEADERSHIP ADDICTION Administrator Degrees FEW CREATORS Low Variation Culture PAID TO STOP GROWTH In Two Wars BIG TO BIGGER DESTROYS NEW TO BIG Entrepreneurial Exodus LOST TALENT Lack of Pipeline BIASES OPTIMIZATION BIG TO BIGGER “INNOVATION” IS FAILING AT A DNA LEVEL Limited Boundaries + Permissions DESTRUCTIVE BIASES Inside Out Market View TRUMPS OUTSIDE IN Voice of Customer TRUMPS CUSTOMER BEHAVIOR Zinger Questions Kills ACTION, EXPERIMTANTION & NEW LEARNING
- 6. New-to-Big Outside-in Power-Law outcome Opaque markets Dominate share “What we can become” What Customers Do: New Behavior Big-to-Bigger operations Inside out Incremental outcome Visible markets % Share “What we can make” What Customers Say: Existing Behavior TO: Total Addressable (customer) Problem: FROM: Total Addressable (existing) Market: T.A.P. Discoverable T.A.M. Knowable MISSINGTHE MINDSETSHIFT: FROM TAMTO TAP
- 7. DO vs.SAY Customers don't tell the truth (Your Baby’s Ugly!) Watch customer actions, not words VOC most often validates enterprise bias Drive experiments that reveals high fidelity truth
- 8. TURN OUTSIDE IN Restored instinct: Engage customer first The truth is outside the building, in unbiased customer behavior
- 9. 2030: FROM SHAREHOLDER TO CUSTOMER THE FINK EFFECT 2016 2020 2025 2030 MARKETS MODELS TECH TRADITIONAL BLUEPRINT PLANNING THE GROWTH OS DISCOVERY KNOWABLE KNOWABLE KNOWABLE KNOWABLE UNKNOWABLE UNKNOWABLE UNKNOWABLE UNKNOWABLE UNKNOWABLE
- 10. THEREARE NO MOONSHOTS YOU NEED TO CREATE A LADDER TO THE MOON Enterprise unfair advantage vs. Venture: Multiple category bet Experimentation > Learning velocity = Truth = Growth Scale is created in validating “rungs” to power law outcome
- 11. RIGHT, ON TIME: A “POSITIONED CAPITAL” PORTFOLIO 1 YEAR 10 YEARS MEET THE FUTURE DISCOVER + EXPERIMENT FASTER: TECH DISRUPTION MODEL DISRUPTION
- 12. THE BIONIC GROWTH OS (4.0) INSTALL DISCOVER + GENERATE SCALE:TALENT+ORG ECOSYSTEM Model Install Diagnostics Talent + Org Culture Mindset + Mech. Funding Thesis Decision Arch. Metrics Labs Coaching Testing Metrics Opportunity Areas Recon Ideation GROWTH BOARD VC PORTFOLIO + INVESTMENT PORTFOLIO + METRICS ▲ TAP 1 2 VALIDATE LEAN EXPERIMENTATION + METRICS TAP 1 2
- 13. THE GROWTH BOARD: A GROWTH DECISION ARCHITECTURE GROWTH BOARDS SOLVE 3 COMMON + FATAL “INNOVATION” PROBLEMS: Talent (Super Administrator vs. Super Commercializer) Product or Technology “In Search of Problem” (R+D, Inside Out) Premature Scale (Too Much Money, Too Fast) MANAGE GROW a LAUNCHSEED Co-Founders Cross-functional Team Full Growth Team I I III I III Validate Problem Identify + Optimize KPIs Scale Across Segments + Customers Fight for TRACTION Drive to SCALE Sell to One Segment Validate Solution Validate Model DISCOVER & GENERATE: Map Future State of Market, Select Opportunity Areas, Generate Solutions VALIDATE MINDSET + MECHANICS CEO CFO CMO CTO CIO Pres., BU VC/CD (Internal) EIR (External) II III Search for SHOULD
- 14. VALIDATE: PRODUCTIVE FAILURE Validate (Lean) is enterprise speak for lean startup (MVP) Enterprise rigor, custom signals + metrics Productive failure = cheap, fast failure: Growth The only way to get the truth; lower the price
- 15. NET NEW LEARNING: EXPIREYOUR DATA Put an expiration date on data Reset all old assumptions + data (>12 Months) Revalidate data on 1st principles logic
- 16. WE DEFEAT BIG TO BIGGER DECISION BIASES “Make Better Decisions” - Harvard Business Review, May 2015 Confirmation Bias NOT IMPARTIAL Anchoring Bias BELIEF IN CORE FACT Planning Fallacy Bias VAST UNDERESTIMATION Consensus Bias GROUP THINK Status Quo Bias PREFER WHAT IS, IN ABSENCE OF CHANGE Controllability Bias BELIEF IN INDIV CONTROL Loss Aversion Bias OVERVALUE LOSSES Ego Bias EXPERIENCE INSTINCT Optimism Bias OVERCONFIDENCE Sunk Cost Fallacy NON RECOVERABLE COSTS Commitment Escalation Bias GOOD MONEY AFTER BAD Present Bias VALUE IMMEDIATE vs. LONG TERM Vividness Bias OVERVALUE FLASHY Stability Bias BELIEF THAT EMORY IS STABLE Cognitive Rigidity Bias FOCUS ON ONE SOLUTION
- 17. Opportunistic Ideas ROADMAP TO POSITIONED CAPITAL PORTFOLIO TAP OPPORTUNITY AREAS GENERATED SOLUTIONS VALIDATION DOWNSELECTION POSITIONED CAPITAL PORTFOLIO Opportunity Area 1 Opportunity Area 2 Opportunity Area 3 Internal Ideation Campaigns SMEs Extreme Follower Model Bionic Network & EIRs SEED LAUNCH GROW
- 18. GE GROWTH OS: FASTWORKS Better Results Growth Boards & Teams Thinking Differently Leadership & Training ~3,000+ leaders reached through Crotonville-level three day leadership training 300 + GE coaches trained 170,000 employees began self-guided learning & exploration GROWTH BOARDS implemented to help focus investment on things that matter to our customers. 100’s SEED to LAUNCH projects using external coaches & entrepreneurs to solve gritty customer problems. ~100+ business-wide projects underway focused on NPIs, Comm Ops, ERPs, etc. 1 2
- 19. CORE IMPACT: APOSTIONED CAPITALPORTFOLIO NewtoWorldNewtoMarketNewtoCompany SEED LAUNCH GROW P&L1 P&L2 P&L3 P&L4 P&L5 102 COs $5 B Est. $64M Exp 121 COs $5 B Est. $84M Exp 76 COs $2 B Est. $26M Exp 51 COs $4 B Est. $55M Exp 68 COs $3 B Est. $96M Exp 21 COs $1 B Est. $15M Exp 9 COs $.5 B Est. $4M Exp 24 COs $1.2 B Est. $17M Exp 18 COs $.7 B Est. $14M Exp 213 COs $9.2 B Est. $197M Exp 115 COs $3.7 B Est. $55M Exp 162 COs $9.5 B Est. $123M Exp FORTUNE 10 Portfolio Distribution
- 20. CORE IMPACT: $22B FORTUNE 10 DIVISION 300% Increase in NPI Speed 80% decrease in NPI Cost IMPACT: • ‘12 – ’13 • ‘13 – ’14 • ’14 – ‘15 2012 – 13: July to July Average: 750 Days 2013 – 14: July to July Average: 500 Days 2014 – 15: July to July Average: 250 Days
- 21. THE NEW GROWTH MINDSET
- 22. LEAD BULLETS ONLY M+A won't work forever The BIONIC GROWTH OS is not a Beat- the-Quarter solution The BIONIC GROWTH OS is a permanent Win-the-Future capability
- 23. THE NEW CEO JOB: OPERATOR +VC The ambidextrous leader thesis Must be super administrator + super creator No longer keeping up with competitors, it's customers The CEO who learns the fastest, wins Wishful thinking is the enemy (Musk)
- 24. NEW BOUNDARIES + Often more valuable than money Unlock or block model innovation Have very deep impact into organization/speed
- 25. ENDTHE ADDICTION TO BEING RIGHT Questions, not answer-driven leadership Answers stop learning, perpetuate biases Ask questions that drive to new truths What did you learn? How do you know?
- 26. END SUCCESS THEATER: GO ZOMBIE HUNTING Your growth capital + talent is trapped Near misses are failures masquerading as success Stop promoting intellectual dishonesty Allow teams to sell, unsell the dream Prevent premature scale, reduce price of failure
- 28. END VALLEY ENVY: GO ONTHEATTACK Valley has glass jaw and capitalization crisis (Powerball tickets) Now part of the global startup revolution Install. Growth. Go. Compete. Attack the startups No more Hail Marys vs 50:1
- 29. SOLVETHE LENNIE CRISIS: LOVED TO DEATH Large enterprises have a way of squeezing great opportunities to death Big to bigger “de-risking” skill create incremental outcome Stakeless stakeholders syndrome
- 30. BIONIC GROWTH OS LENSES + INSTINCTS
- 31. LENS 1: PROPRIETARY GIFTS Know Thy Company Outside In Market Truths Quit Weaknesses INSTINCT: SEEK UNFAIR ADVANTAGES Fearlessly Leverage Gifts Expand Aggressively from Core Gifts Entangle Analog + Digital
- 32. LENS 2: EXTREME FOCUS Takes the greatest courage Experiment, fail, find light Accept “good enough” answers Live vs. Die decision tree Speed over confidence (seed) INSTINCT: ELIMINATE OPTIONS Startups don’t die, they run out of money when they lose focus Rarely outside proprietary gifts
- 33. LENS 3: PAINKILLERS Vitamins are elective, Painkillers are indispensable Create addictive drugs for lifelong chronic pain (kill biased pet, entitlement projects) INSTINCT: SEEK CHRONIC PAIN Pain defines true revenue origins – the need you truly serve Pain reveals proprietary customer insights & secrets
- 34. LENS 4: 10x IMPACT Incrementalism is a Path to Nowhere Forget Benchmarking, New Metrics Over-index investment in 10X drivers INSTINCT: CREATE RADICAL DIFFERENTIATION Don’t Chase Competitors, Press Releases or Features Search for Lynchpin Insights You Need First Person Evidence Get Back to the Shop Floor
- 35. LENS 5: CREATE PERMANENCE You must aggressively design in Customer Dependence Design in permanence – explicit + implicit Entangle analog + digital assets and user experiences (hard to replicate) Create 1 of 1 INSTINCT: SEEK TRUTH NOT HOPE Commit to Commercial Truths Seek Productive Failure, Success is a Bad Educator Embrace Aggressive Darwinian Learning Destroy ‘Success Theater’
- 36. COMMERCIAL SPEED + TRUTH + = MODEL+MINDSET+SYSTEMS = GROWTH
- 37. QUESTIONS (OR SKEPTICISM)? “Sow a Thought and you reap an Action; sow an Act and you reap a Habit; sow a Habit and you reap a Character; sow a Character and you reap a Destiny” - Emerson 4 COLUMBUS CIRCLE NEW YORK, NEW YORK David Kidder, Co-founder Dkidder@bionicsolution.com
- 38. WHAT IS YOUR ROLE? EVANGELIST / EXAMPLE FOR A NEW WAY OF THINKING PROVIDE AIR-COVER / RESOURCES / REASSURANCE LEAD THROUGH QUESTIONS, NOT SUGGESTIONS REWARD VALIDATED OUTCOMES, EVEN IF THEY ARE FAILURE SPOT ENTREPRENEURIAL TALENT AND LEADERSHIP INVEST BASED ON THE RIGHT CRITERIA
- 39. WHAT ARE THE MECHANICS? STRUCTURE: CROSS FUNCTIONAL LEADERSHIP TEAM + BIONIC EIR FOCUS: NEW TO BIG INVESTMENT DECISIONS + PORTFOLIO MANAGEMENT OUTCOMES: FUNDING DECISIONS; BOUNDARIES AND PERMISSION FOR TEAMS; EVOLUTION OF GROWTH OS FREQUENCY: QUARTERLY MEETINGS; INTERIM UPDATES AS NEEDED GOVERNANCE: NO ATTENDANCE, NO VOTE
- 40. DO’S & DON’TS SERVING ON A GROWTH BOARD REQUIRES A CHANGE IN MINDSET AND FOCUS
- 41. DO: Be open and flexible Fight the “addiction to being right” Evaluate the opportunity by a new set of metrics Focus on the customer validation not your own biases DON’T: Be open and flexible Fight the “addiction to being right” Evaluate the opportunity by a new set of metrics Focus on the customer validation not your own biases
- 42. EXECUTIVE SPONSOR THE EXECUTIVE SPONSOR ROLE IS SIMILAR TO THE GENERAL PARTNER IN A VENTURE CAPITAL FIRM: 1. Executive Sponsors build the Growth OS capability and manage the portfolio for their opportunity area. 2. Act as internal startup sponsors who offer advice, introductions, leverage, protection and support to their teams
- 43. ROLE OF EXECUTIVE SPONSOR MINDSET & ADVANTAGE BUILD OS CAPABILITY ONGOING PORTFOLIO MANAGEMENT SUPPORTING Activate venture mindset Eyes on, hands off Question driven Empower commercial truth (evidence / do – bust biases) Serve + Protect Teams Hypothesis driven experimentation (MVP) Enable productive failure Create single point of reporting to board /org Defeat enterprise frictions Enable productive failure BUILDING Tap driven: framed opportunity areas Drive expanded permissions and boundaries Drive learning velocity (build strong outside in network) Identify + unlock talent (install enabling tools, training, platforms, services to scale EXECUTING Expand portfolio Drive volume of bets Assist in developing entrepreneur networks in their IOA Support metrics & portfolio management Guide learning agenda (results, benchmarks, what stages teams belong in) Capture + synthesize key learnings across portfolio
- 44. HOW TO SUPPORT TEAMS STAGE Invest in stages to ensure that teams have clearly identified a problem worth solving and driven by experiment driven commercial truth OBSESS Focus team into obsession with customer problem first, then solution, then model. Order matters. SIMPLIFY Remove common frictions and barriers , find the resources that accelerate learning (success + failure) NETWORK To internal teams and external contacts, companies, networks the create learning velocity and unfair advantage PROTECT Create direct reporting relationship to defeat stakeless stakeholder frictions + capture teams full focus GARDENER Not general. Eyes on, hands off. Testing obsessions and resourcefulness of teams.
- 45. EXECUTIVE SPONSOR MECHANICS One (1) customer facing SVP (level) per opportunity area Must have a level of tenure/seniority/respect in organization to take action Dedicate one (1) hour/week to teams (as required) Identify/leverage additional supporting sponsors as needed from HR, IT, Comms/Legal, Finance, etc. Participation in Accelerator Board meetings (as required)
- 46. BIONIC GROWTH OS: THE WORK
- 47. Opportunistic Ideas ROADMAP TO POSITIONED CAPITAL PORTFOLIO TAP OPPORTUNITY AREAS GENERATED SOLUTIONS VALIDATION DOWNSELECTION POSITIONED CAPITAL PORTFOLIO Opportunity Area 1 Opportunity Area 2 Opportunity Area 3 Internal Ideation Campaigns SMEs Extreme Follower Model Bionic Network & EIRs SEED LAUNCH GROW Mapped investment areas determined by partner’s current pipeline, proprietary gifts, disruptive technologies, and customer needs Portfolio of potential solutions by investment area to send through Validate Customer-validated solutions to launch in-market Validated Winners
- 48. DECISIONS KILL: Customer problem invalidated ADVANCE: Customer problem & solution validated RE-VALIDATE: Customer validation inconclusive PIVOT: Customer problem validated and solution invalidated PAUSE: Customer problem validated, solution validated and market inconclusive RETURN TO CORE: Incremental problem and/or solution validated
- 49. BIONIC GROWTH OS: LENSES + INSTICTS
- 50. SEED I: PROBLEM VALIDATION What insight from the customers surprised you most? Would you personally invest in this solution or another solution to this problem? Are you telling the commercial truth? What is the customer problem hypothesis? How has talking to customers changed your understanding of the problem? Can you define a target customer with this problem? How painful is this problem for this customer? How did you measure the painfulness of the problem? How do customers solve for this problem today? How will your solution address the customer problem? What metrics show that you validated the problem? What do you want to learn next? What are you asking for today?
- 51. SEED II: SOLUTION VALIDATION Do you feel your solution has qualities that create "radical differentiation?" Do you feel the team had boundaries around the experiments that limited their learning? Why will we win? What new information have you learned about the customer problem? Did the target customer change or become more refined? Were you surprised by which assumptions were validated or invalidated? Why does your solution solve the customer problem? What features of the potential solution resonated the most? What features of the potential solution resonated the least? Do you believe your solution solves their problem significantly better than current solutions? What was the “ask” of your customers? What percentage of customers took action? What do you want to learn next? What are you asking for today?
- 52. SEED III: BUSINESS MODEL VALIDATION What new functions are needed to create this new economic model? Does the unit of revenue align with a new or current value (outcome) for the customer? What leverage can we bring to bear on this solution? How did your solution change as you were validating the business model? Which assumptions about your business model were validated and invalidated? How will customers buy this solution and will they pay for it with new or existing budget? What are your initial customer acquisition strategies? What channels will you use to deliver your solution to paying customers? Do you think we should, partner or buy this solution? How do you plan to launch the solution? What is the timeframe? What kind of technical investment is required for launch? What do you want to learn next? What are you asking for today?
- 53. BIONIC GROWTH OS: THE TALENT
- 54. HOW TO SUPPORT TEAMS CURIOUS Open to learning and exploring new information and practices; interested in understanding how things work INNOVATIVE Not afraid to challenge the status quo, question assumptions and generate new ideas by looking at issues from multiple angles COURAGEOUS Takes calculated risk and purposefully puts self in challenging situations where success is not always guaranteed FLEXIBLE Remains engaged during stressful situations brought by ambiguity and conflict CONNECTOR Takes time to reflect on experiences; spends focused energy processing information, gaining deeper insights intro problems, themselves & others as a result
- 55. TEAM WORKSHEET SCORECARD Extreme Focus: Is there an extreme focus on a single Customer Problem? Painkiller vs. Vitamin: Does the concept / solution address a critical customer problem? 10X: Is this solution significantly better than current solutions? Proprietary Gift: Does this idea have the potential to leverage core assets and strengths? Permanence: Will this solution create customer dependence? Extreme FocusBroad PainkillerVitamin 10XIncremental ProprietaryIndependent PermanenceTemporary