Webinar: 8 Ways to
Monetize Innovation
Innovation Masters Series
April 1, 2015
Luis Solis, Chief Innovation Evangelist, Imaginatik
Daniel Friedman, VP - Client Development, Imaginatik
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Why the Innovation Masters Series?
!  Stay “at the edge” by learning from real-world practitioners
!  Ask tough questions, receive smart answers
!  Advance the state of the art of innovation discipline
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Today’s leading
companies
balance
Operations and
Innovation
to achieve
Growth goals
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What we’ve learned about innovation success…
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We believe that
Innovation
Programs across
a multi-year
Journey result in
‘beyond
incremental’
Growth
Innovation Maturity Framework
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Today’s Experts
Luis Solis
Chief Innovation Evangelist, Imaginatik
Chief Evangelist Officer of Imaginatik plc, Luis is a pioneer in the diffusion of innovation
strategy and enterprise software in global organizations. As entrepreneur and business
builder, he has taken companies public, guided global roll-ups, started ventures and
turned-around software companies. A graduate of Stanford University’s Business and
Law Schools, Luis authored “Innovation Alchemists: What every CEO needs to know
to hire the right Chief Innovation Officer”, and is an in-demand speaker on leadership.
Daniel Friedman
VP Client Development, Imaginatik
Daniel specializes in defining successful client strategies that positively impact company
performance. He does so by collaborating with client executives to better understand
their critical business issues and leveraging innovation techniques and processes to
drive tangible results. Curious by nature, Daniel leverages his experience leading
strategic HR initiatives at Staples and consulting with companies such as Shell, Disney,
Alaska Airlines, and SAIC on organizational strategy to partner with Imaginatik clients in
creating innovation programs that deliver top- and bottom-line success. Daniel
graduated with an MA in International Affairs from The George Washington University
and a BA in Political Science from Boston University.
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Conundrums
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Traditional Growth Paths Need Fresh Thinking
Need a new way to catalyze New Revenue Sources to accelerate Revenue/EBITDA growth
Situation
• 
• 
• 
• 
• 
Line extensions fall short of growth
target
M&A rarely delivers value
Hand-offs to Lines of Business is
essential
Speed important, but so is reduced
risk
A Portfolio of opportunities is ideal
Invest in
Operations
External
Investment
Close-In,
VC, Joint Ventures &
Business Extensions &
Incubators / Accelerators
Partnerships
Build
?
Acquire
@ Premium
Buy
① 
What if you could accelerate your new business areas?
② 
What if such a strategy would help stimulate and tap entrepreneurial talent and under-used creativity?
③ 
What if the proper structured process had the potential to substantially contribute to growth attainment with
no less speed, and less risk, than alternatives?
④ 
What if operating line executives came to see this emerging business creation as a reliable source of viable
growth bets?
⑤ 
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M&A
What monetization instruments do you use, when, why, and as measured by what?
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The Questions We Often Hear
①  What’s better, an incubator or an accelerator?
②  How might we spawn our own emerging businesses?
③  How might we in Innovation better leverage our internal
VC arm?
④  When, and how, do we set up a separate “skunk works”
innovation team?
All good questions – however, in isolation, the answers are misleading
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Monetizing Innovation: Incubator & Accelerator
•  Home to SMB-focused startups
to scale their businesses
•  Formal user experience lab
•  Holds the CC innovation team
•  3-5 startups “in residence” twice
per year
•  Business-unit aligned Tech scale-ups
with Executive Sponsor
•  Adjacent Innovation " ~$100MM in
5-7 years
•  Incubation team, processes, tech
scouting and re-integration
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Monetizing Innovation: Skunk Works
NIKE’s Innovation Kitchen
!  Don’t try to get it in…restricted!
!  Gave birth to first Air Jordan
!  At the edge: 3D Scanners, new
weaving technique " FlyKnit Racer
!  Premium on disruption
Staples Velocity Lab
•  Radical take on e-commerce for #2
online retailer
•  Extend B2C concepts to B2B world:
search, SEO and personalization
•  Right customer, thing and time!
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Monetizing Innovation: Partnerships For…
Capacity
Capability/Technology
Pfizer’s CTI (Center for Therapeutic
Innovation) partners with Academia to
Whirlpool & Mastercard Partner up to
•  amplify its research assets
•  rethink/simplify laundromat payments
•  embrace Open Innovation for speed
•  shift: manual " mobile (1000
machine NYC pilot)
to drug/therapy development
•  rethink risk/investment rules for science
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•  payment = rich customer experience
A Framework for Innovation
Decision-Making & Design
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Consider All 8 Instruments For Monetizing Innovation
The 8 Instruments
M&A
Business
Incubator
Venture
Funding
1.  Accelerator
2.  Business Incubator
New
3.  Internal R&D
4.  Licensing
5.  M&A
6.  Partnership – capacity
Accelerators
Adjacent
extension
7.  Partnership – capability-build
8.  Venture funding
Partnerships – capacity extension
Commercialization /
Licensing
Each has different:
•  Business objective(s)
•  Focus
Core
Foundations of Value
Partnerships – capability build
•  Characteristics
Internal R&D
•  Capabilities to enable &
assimilate
1 – 1.5 years
Modified from Geoffrey Moore, and BCG frameworks
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1.5 – 3 years
Time To Value
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•  Time horizon, and
3 – 5 years +
•  Risk profile
Key Challenge: Use The Right Instrument for the Right
Reason
8 Instruments
Partnership –
capabilitybuild
Partnership –
capacity
extension
Venture
Funding
Extend new
assets
Mitigate risks
of market
expansion - to
capture ‘holes’
and/or nonconsumption
Monetize IP
Mobilize
around big
bets
Speed to
market
Reduce
capital risks
for new
foundations of
value
Exchange
capex
environment
for equity
Transaction or
revenue
sharing
arrangements
Corporate ‘tax’
Acquisition
Risk / reward
share
Subcontracting
Exchange
capital for
equity
Return fatigue
Kiss lots of
frogs
Business
alignment
50% struggle
within 18
months
Trust &
continuity
Cannibalizatio
n risk
1:13 success
rate, typically
Use as
training
program
DIN –
governance
DIN –
governance /
community
Complement
with other
instruments –
‘cisco’ model
M&A
‘playbook’
Shared,
quarterlybased scorecarding
Clear
migration
towards new
foundations of
value
DINgovernance
3 – 6 months
6 – 12 months
6 – 18 months
1 year
2-3 years
6 – 12 months
1 – 3 months
18 months
Business
Incubator
Support startups via
guidance &
“fueling”
Support startups via
‘sharedservices’
Mechanism
of execution
Exchange
time /
lessons /
methods for
equity
Challenges
Effort fatigue
Essential
objective
Considerations
M&A
Accelerator
How to
overcome
Time to
impact
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Commercialization /
licensing
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Internal R&D
The Choreography Of “Using The Right Instruments Right”
Steps
Use the right instrument
Clarify the
boldness of
intent
The Essential
Focus
!  Objectives
Understand
the
ecosystem
!  Possible futures /
Use the instrument right
Design the
portfolio of
instruments
Launch
Manage the
Portfolio
!  ‘As measured by…’
!  Awareness
scenarios
!  Governance
!  ‘Value creation /
impacts
where value is
!  Ecosystem:
!  Risk / reward
transformation’
!  Storytelling
being created,
activities /
models / programs
team
!  Culling &
and destroyed
actors /
– internally &
!  Execution plan
supporting
motivations /
externally
!  Explicit migration
aggressively
!  Insight into
!  Impacts, as
measured by…
constraints /
!  Executive
opportunities
alignment!!!
!  Behavioral
!  Visualization of
plans to new
!  Alignment check-in
foundations of
!  ‘As measured by…’
Realize /
refine /
iterate
!  Celebrate
!  Learn
!  Support
!  ‘What it means
to you is…’
value
*THE* ‘gotcha’s that
will get’cha’
change models
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!  Alignment
!  Bold enough?
!  Insight into holes,
non-consumption
and potential
sources of
disruption &
opportunities
!  ‘As measured by…’
!  Governance
!  Alignment
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!  Patience
!  Opportunity costs,
and pressures
from the business
!  Assimilation,
assimilation,
assimilation
Note: Critically, it is one thing to figure out which to use, it is quite
another to assimilate its outputs – to realize their potential
Where strategic intent mashes-up with innovation journeys.
We call this the “what lights” up exercise
Different stakeholders exist within your ecosystem –
Alignment around new sources of value is critical –
Who is impacted and/or engaged? How?
What type of value is being created, and how will it be
measured?
The strategic question:
Using the right instruments
and using them right – and
how do you get alignment?
How do you monetize your
innovations, over what time
period, managing what types of
risk / return objectives?
Of Capabilities – who does what,
how – e.g., what is the new ‘20%’ you
are attempting to migrate towards?
(otherwise, why bother?)
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Monetizing Innovation: A Multi-Period Journey for Value
1. Clarify where value is being created, and destroyed
The Question
Ecosystem – Actors
Who impacts whom, how, and
how much
which purposes &
execute on them
quickly?
Essential value to capture
Value, as defined by… And where need we play?
Where is value being created,
And destroyed?
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The new 20%
What do you Own, Control,
Influence, Acquire, Monitor
Instrument Relevance
7b
Design execution & ‘launch’ leanly –
including how to shape the ecosystem for systemic impact
Roadmap &
Blueprint / Playbook
Recommended next steps &
commitments for action
12a
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Stakeholder / Assimilation /
Engagement Plan
3. Design the instruments & execution models
9a
Business Case / Projections
Portfolio Design
(instrument capabilities & assets)
The Instruments – which,
when, where, how, why, with
what implications?
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Partnership Models:
Implications on Capabilities
9b
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12b
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Financial Projections
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2
Demonstrate
efficacy of
4. 
Possible Futures / Scenarios
7a
5
Frames
landscape
instruments for
Frame *the* essential questions
determine which
3
1
How do we
2. Prioritize around the ‘new 20%’
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Your Experts
Luis Solis
[email protected]
617-784-8366
Daniel Friedman
[email protected]
949-307-3781
Imaginatik plc
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