1 / 10

1890

The pace of change is accelerating. Adoption of innovative new consumer technologies. 80%. 1937. 1939. 1950. 1962. 1964. 1980. 1968. 1995. 2003. Penetration rate of US households, %. Radio. Color TV. Micro- wave. VCR. Cellular phone. 60%. Internet. Electricity. Facebook. 40%.

carcher
Download Presentation

1890

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The pace of change is accelerating Adoption of innovative new consumer technologies 80% 1937 1939 1950 1962 1964 1980 1968 1995 2003 Penetration rate of US households, % Radio Color TV Micro-wave VCR Cellular phone 60% Internet Electricity Facebook 40% 2010 2013 Tablet Wired telephone 20% Automobile Refrigerator Dishwasher 1890 1900 1923 1950 1960 1972 1984 1990 2006 2010 2020 SOURCE: US Census Bureau, The New York Times (Nicholas Felton), Marketer.com in Enjeux-Les Echos, Sep. 2014

  2. Tech transformation is nascent in Mining, with significant value at stake • Inflection point Technological revolution by industry • Advanced incumbents and estab-lished “startups” constitute the new normal • Entertainment • Tourism • Telco • Financial services • Retail • Today • High tech • Health • Automotive • Laggard incumbents fail • Utilities • Infrastructure and security • Mining • Time • Oil and gas SOURCE: Global Executive Study and Digital Business Research Project

  3. Most companies are unprepared for innovation and disruption Percentage of global executives (%) • Although most executives agree that innovation is critical for their business … • … few are satisfied and involvedin making it happen 84% 6% • Satisfied with innovation performance • Innovation is important to growth strategy 23% • Leadership involved in setting budgets/targets 80% • Business models are at risk SOURCE: McKinsey Global Innovation Survey, McKinsey Innovation Practice

  4. The Eight Essentials determine mastery of innovation Aspire Do you accept innovation-led growth as absolutely critical, and do you have cascaded targets that reflect this? Choose • Strategy Do you invest in a coherent, time-risk balanced portfolio of initiatives that are resourced to win? • Discover Do you have actionable and differentiated business, market and technology insights that translate into winning value propositions? • Evolve • Ideas Do you create new business models that provide defensible, robust and scalable profit sources? • Accelerate Do you beat the competition with fast and effective development and launch of innovations? • Scale Do you launch innovations in the relevant markets and segments at the right magnitude? • Scale-up • Extend Do you win by creating and capitalizing on external networks? • Mobilize • Mobilized org Are your people motivated, rewarded and organized to repeatedly innovate?

  5. Companies that master more Essentials generate superior returns Index of Economic Profit Generated by Mastery of Essentials Mastering 5 or more Essentials is needed to realize exponential value creation from innovation Innovation practices are synergistic—an integrated operating model with strong performance management is needed Source: McKinsey Innovation survey 2016 McKinsey & Company • 5

  6. Differences between innovation leaders & laggards • Top-quartile performing companies • Bottom-quartile performing companies Aspire 6x Choose • Strategy 10x • Discover • Evolve • Ideas • Accelerate • Scale • Scale-up • Extend • Mobilize • Mobilized org SOURCE: Innovation Diagnostic Benchmarking Survey 2016

  7. A bold but plausible Destination Aspire: Set a bold but plausible Destination for innovation to deliver “ I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth. • – President John F. Kennedy,Address to Congress on Urgent National Needs, May 25, 1961

  8. Quantify the Aspiration to create accountability and measure progress CLIENT EXAMPLE • 2025 Target • The “green box” is what innovation needs to deliver, and can be broken down into the business as targets • If the green box is not greater than zero, your organization will (quite rationally) not innovate • Innovation Theme Protect the Core(BUs 1 & 2) $0.8B • $1.5B $6.4B Diversification and Adjacencies $0.3B • $2.0B Building Partnerships $0.2B • $2.0B $2.0B • $0.5B New business models $0.2B Where you are now(2018E) Market growth (i.e., fair share) Operating & Commercial Improvements Inorganicgrowth (M&A) Innovation Where you want to be (2025) Total Green Box $1.5B “Pick well” “Do better” “Buy stuff”

  9. Aspirations take many forms—but they must be specific and measurable • Exemplary Aspirations from a variety of contexts: • A few Aspirations we’ve set with our clients: • Reach another 300M children and prevent 6M more unnecessary deaths by 2020 – by accelerating vaccine uptake, improving efficiency of delivery, ensuring program sustainability, and shaping the market • Drive $500M of incremental revenue by 2022 through reframing our core markets, building tomorrow’s business models, and growing emerging markets • Med Tech • Grow membership by 50% and reduce healthcare costs by 35% by innovating our customer and provider experience • Payor • Attract 300M new members through digital platforms and ecosystems • Auto-motive Services • Create $700M of growth over the next ten years: $400M from new businesses to complement the core, and $300M from reinventing the core, e.g. adopting new processes and reducing costs to help fund new initiatives. • Lead the transformation from a “mobile-first” to an “AI-first” world, putting AI and deep learning at the heart of our services • Generate $150M of incremental EBITDA by shaping our core markets, moving closer to our end-customers, and leading in production processes • Mining • Double clean-tech revenue and investment in 10 years, and reduce greenhouse gas emissions by 1% in 7 years SOURCE: McKinsey Innovation Practice

  10. Choose: Construct a portfolio that can deliver the aspiration Different archetypes of projects across the portfolio … … require different development pathways Potential ImpactUpper bound EBIT, USD millions De-risking • Competes with (part of) our core business • High level of ambiguity on delivery path 60 Disrupt 50 De-riskingand accelerating • Unknown path to solution • Uses technologies & capabilities new to company • Significant cross-BU & change management required 40 30 Breakout growth 20 Accelerating • Generally known solution • Limited capability and infrastructure set up to deliver • Previous use cases exist • Limited Cross-BU implications Core 10 0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Uncertainty score Indicated range of value divided by high EBIT

More Related