• Ferhan Bulca

    I am an executive leader and a serial intrapreneur focused on innovation and design thinking. My purpose in life is to create products and services that make the world a better place to live in.

    In the course of my career, I have developed a deep understanding and expertise on all aspects of technology commercialization and product/service development. As a result, I have built multi-million dollar businesses from the ground up.

    I am the creator and the Lead Instructor for Business Innovation Certificate Program at University of Toronto, School of Continuing Studies.

    I offer business consulting services and I am available as a speaker for private and public events.

    Watch my recent talk at Ashoka Canada's Changemakers event at University of Toronto on YouTube.

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More Thoughts on Large Companies and Innovation – An Oxymoron?

A few days ago, I posted a blog article on how large companies can (and should) leverage their strengths to create innovative solutions to problems. I was happy to see comments and two other posts in response, one in agreement, the other opposing my thoughts. I think it is fantastic to have differing opinions and wanted to share my follow-up thoughts on the topic.

Jennaromeo agrees with me in her post at  http://bizgovsoc4.wordpress.com/2012/09/11/innovation-at-large-companies-is-it-possible/. On the other hand, nyeinzawko thinks differently in http://bizgovsoc4.wordpress.com/2012/09/11/are-giant-corporations-really-a-place-for-great-innovations/#more-701.

I should clarify one of my points: I don’t make a broad arguement that large organizations are the catalysts for innovation. In fact, I don’t think that they are. My point is that large organizations have certain strengths that could make them catalysts if they learn how to leverage those strengths. Some organizations have figured out how to leverage their strengths. However, such organizations are more of an exception than the norm. I argue that all large organizations can and should create innovative arms as a way to secure future growth and, more importantly, relevance to customers.

As Drucker said “the purpose of a business is to create a customer.” Creation of customers only happen if an organization makes a concious effort, understand the evolving needs of current customers and unmet needs of non-customers. This is not business as usual.

In closing, I will emphasize the work done by intrapreneurs at organizations across the globe. While entrepreneurs get (well-deserved) recognition for their hard work, intrapreneurs in organizations are not well-understood nor appreciated. Large organizations that recognize the value of intrapreneurs and allow them to leverage the strengths of the organization can become the catalysts of innovation.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

 

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Intrapreneur? You mean “entrepreneur?” What is an intrapreneur?

Lately, I am going through this questioning quite a bit mainly because I am looking for my next engagement either as a full-time leadership role or as a consultant to help an organization create something new. While everybody has an idea (albeit somewhat distorted from reality) about what an “entrepreneur” does, very few understand the role of an intrapreneur. Therefore, I decided to write about it with examples from my own experience.

First, let me explain what I do for organizations: I help them enter a new business area (new market, new product, new service, new P&L), which is typically outside of their knowledge and expertise area.

Now, let’s talk about what my engagements look like. With almost no exception, I am brought in by top executives of the company. This relationship is critical to obtain and maintain sponsorship for the initiative. I dedicate a significant portion of my effort to ensure that the initiative is strongly supported by top executives and the board.

Once in the company, the first thing I assess is its culture and how it sees new initiatives. Culture, in my opinion, is the one factor that can make or break an initiative. The fact that any new initiative requires partnerships, both internally and externally, understanding the internal dynamics is crucial to success. In order to do this, I embed myself into the organization’s development group(s). From here, I reach out to all critical players (at this point, they may not even know that they are players): marketing, sales, finance, research, development, service, support, list goes on. I form a very small (3-5 people) team to work together at this phase.

The next step is to clearly identify the pain point(s) of customers. In almost all cases, the organization thinks heavily in the solution domain but it is critical to articulate the problem(s) of the customers. What would make them running to our doors if they hear that we solve a major problem for them? Christensen calls it the “job to be done” for the customers. If we cannot articulate what that job is, the sexiest technology in the world is useless to most (technology junkies excepted).

Once the problem is defined, the skills required to solve the problem start to shape up. At this point, the team is supplemented with subject matter experts in critical areas.

Then comes the ideation step, where solution concepts to the problem are created. Most people are familiar with this step. Unfortunately, also most people think that this is where innovation starts. In fact, ideation is where solutions are sought to a problem. Problem definition is the first step and it takes inputs from many participants, including existing and potential customers. Ideation involves internal and external participation. At this point, the team may expand if external partnerships are required.

Next is transition to solution development and testing (validating) the solution against the problem. Almost always we find about things we missed at the first validation cycle and feel like idiots. Unearthing facts and requirements is the whole purpose of early validation. Quite a bit of effort goes into creating that “just enough” prototype (Eric Ries calls it “minimum viable product”) and validate it. There is always a struggle where the product appears too raw to the development team and they want to implement just one more thing before they put it in front of a critic (not always the customer). My effort goes into ensuring that the prototype has sufficient features to collect valuable feedback but it does not take forever to get there. Also, the team has to be managed to receive the feedback positively and not be discouraged by it. Otherwise, the team easily gets into “we knew it was too early. Next time, we need more time.” mindset.

This is a highly iterative process and requires a certain type of team to execute. Building, leading and motivating that team is what I do. The team has to be protected from and integrated with the rest of the organization. This seemingly conflicting task is tricky and requires finesse. An isolated “innovation” team, contrary to popular belief, will not be productive. They need to understand what the rest of the organization can do, how much it can evolve, and what their appetite for change is. On the other hand, the main reason the new team exists is because the organization could not do the same job in its routine business. Unfortunately, there is no recipe for the right amount of separation and integration. It depends on the team members, the phase of the project, the culture of the organization, among other things.

If I summarize under a few bullets, here is an overview of the job description of an intrapreneur:

  • Build relations with the exec team and maintain information flow
  • Facilitate the articulation of the problem to be solved
  • Build, lead and motivate a team to make it happen
  • Manage the interactions between the team and the rest of the organization
  • Establish a disciplined innovation culture in the team and maintain it
  • Build and manage internal and external partnerships

I hope I shed some light to what an intrapreneur does.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

Secret to Building New Businesses: Ability and Willingness to Learn

Yesterday, I had a chat with a person (let’s call him Eric) I met during a squash game. After the game, while Eric and I were chatting, I briefly explained what I do for a living: build new businesses from ground up. Eric was curious what this meant and, at one point, he asked me what industry I worked in. I told him that I have been in a variety of diverse industries, such as scientific space exploration and commercial aerospace, biotechnology and life sciences, information technology (IT), and manufacturing. He was puzzled. He asked me how could I go from one industry to a completely different one and build a business. I tried to explain to him that the fundamentals were the same but each engagement I entered was a significant learning experience and that is what drives me. I told Eric that I take each engagement as a new challenge that I have to learn from the basics, but do it quickly and efficiently. I knew what to look for, how to gather the information I need, what to pay attention to and what to ignore, how to create support and raise funding. I went on and on, partially because I just love it and partially because I wanted to make it clear.

This morning, I received an email from a friend, who pointed me to a video his son recorded. As a side note, Kripparrian is entrepreneur I wrote about in an earlier posting (https://ferhanbulca.com/2012/07/25/have-a-vision-follow-your-dream-with-discipline/). Here is the video: http://tinyurl.com/9hc8u8l.

I found the most profound statement I should have said yesterday between 0:45-1:00 mark on the videa where Kripparrian states that “… the only thing you have from your previous [experience] is your ability to learn.” When I heard this, I thought this is the answer I should have given to Eric yesterday. Kripparrian summarized what I was trying to say in a succinct and eloquent way and I thought to myself “I wish I said that.”

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

Academic Publishers’ Business Models Need Major Overhaul

The Economist (http://www.economist.com) is running a survey where they state:

Academics are increasingly up in arms about the hefty fees they have to stump up for must-read journals. They criticise the journals. They point out that much of what publishers charge for, like peer review, is done for free by researchers themselves. Distribution costs, too, have dwindled with the growth of the internet (of which academics were early adopters). The publishers retort that the high fees (and 37% margins) are justified to ensure quality and cover the admittedly non-zero costs of peer review, editing and dissemination. The profits, they add, are proof that the journals are a valuable product that academics have (however grudgingly) been willing to pay for.

The profit margin quoted by The Economist is that of Reed Elsevier’s, which has been the primary target of academic ire in the last few years due to their antiquated business model. It is interesting that Elsevier stated, in a press release (http://www.elsevier.com/wps/find/intro.print/elsevierstatement):

Elsevier is happy to work with any sustainable business model for publishing services. We are happy with models where funding is provided on the author-side or the user-side of the publishing process, or hybrids of the two.

While Elsevier and other publishers of academic journals have had a great run so far, internet and open collaboration brought an end to their business model. Now, there is an urgent need to re-invent their business model to stay relevant and remain profitable. Publishers’ value has been the review process they facilitated, publication quality they maintained and distribution they managed. With internet, the value of print distribution is quickly vanishing. So, the new business model will have to focus on the remaining value and any new value publishers can deliver. Naturally, creating a new business model is a significant task, which goes well beyond the scope of this posting. However, I will speculate on a few areas where publishers can bring value and remain relevant in an evolving space.

Aggregation

Even open source and open collaboration environments require aggregation and facilitation. For example, Linux kernel code is controlled by a consortium led by Linus Torvalds. Innocentive (http://www.innocentive.com), an open collaboration network, enables organizations to solve their key problems by connecting them to diverse sources of innovation including employees, customers, partners, and the world’s largest problem solving marketplace.

As these two examples show, there is clear value in creating a platform for connecting content providers with reviewers and the final content with consumers.

Quality Control

Finding credible information on the internet is a challenge. Academic quality is critical and needs to be controlled. When I say this, I do not mean traditional control or even necessarily keeping the peer-review process. Rather, a possibly new method to ensure that submitted content meets stringent quality expectations, is a result of credible and ethical research, and provides sufficient information to others who may want to repeat or build upon the presented information.

Connections to Previous Work

Printed journals do not do a great job in ensuring the quality of underlying work that results in a publication nor they create a forum for building on existing knowledge. Follow-up work, if published, is only linked to the originating work through references. These connections are very difficult and time-consuming to follow for researchers. Creating a platform, where relevant work can be easily mapped to each other, could create significant value.

Access to Knowledge

While the primary objective of publishers should be to disseminate knowledge as quickly and as widely as possible, current practices do not fully support the needs of the 21st century. Print media takes time to produce, requires a tremendous amount of infrastructure to distribute, and is difficult to search and monitor for relevant updates.  In addition, underprivileged countries cannot afford the prices dictated by publishers. However, mobile devices and internet are quickly spreading in countries where traditional infrastructures lack. Exploiting this booming mobile-based culture in emerging countries could lead to a profitable business model in an under-served market.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

Similarities and Differences Between Entrepreneurial and Intrapreneurial Initiatives

In the past few months, I have spent considerable time with entrepreneurs who are trying to take their concepts off the ground and build businesses. Although my previous experience is mostly in intrapreneurial initiatives, I am happy to be able to help the people I interact with. In return, these interactions are helping me identify similarities and differences between entrepreneurial and intrapreneurial initiatives.

Fundamental characteristics of intrapreneurs and entrepreneurs are very similar, if not identical. Personal and professional characteristics of entrepreneurs are frequently covered in traditional and digital media. In contrast, intrapreneurs attract less attention. While some simply define intrapreneurs as “entrepreneurs who work in a larger organization”, I think the differences are more pronounced. In an earlier blog post, I discussed the characteristics of intrapreneurs (https://ferhanbulca.com/2012/07/06/is-your-skin-thick-enough-to-be-an-intrapreneur/).

The main difference between intrapreneurs and entrepreneurs is in the way they practice their skills and where they put most effort. The following diagram shows my take on the relative weight of the effort by intrapreneurs and entrepreneurs.

Effort comparison for Intrapreneurs and Entrepreneurs

Intrapreneurs’ Effort Goes to Culture, Agility, Accountability and Communications

An intrapreneur’s biggest challenge is to create a new way of doing business in an existing organization. Clayton Christensen famously called it the “innovator’s dilemma” where new ideas get shot down to protect existing, albeit sometimes declining, businesses.

An intrapreneur’s largest effort goes into building agility and accountability in a culture built around an existing business. As Jim Collins stated in Good to Great, this effort increases if the existing business is successful. Collins summarized it as “… good is the enemy of great.” A well-functioning business will be more protective than one that is experiencing difficulties and challenges.

Once an intrapreneur establishes an agile, responsive and accountability-driven team, one of her main tasks become communications. In a larger organization, the number of stakeholders is much larger than the number of stakeholders an entrepreneur needs to interact with.

In comparison, an intrapreneur has it easier in a couple of areas: Access to resources and business savvy. Typically, a company that decides to undertake an initiative is prepared to provide necessary resources. In addition, larger organizations typically have easier access to internal and external business thinkers and leaders.

Entrepreneurs’ Effort Goes to Access to Resources, Business Savvy, Communications and Time & Financial Management

Entrepreneurs typically struggle to attract attention to their ideas and convert them to revenue-generating businesses. The chicken-and-egg issue arises at earlier stages where investment, and hence, resources, is only available if tangible results exist. However, producing tangible results require resources (money, skills, time, facilities, materials) that the entrepreneurs do not have.

Most entrepreneurs operate in a small circle of friends and like-minded individuals. They tend to be passionate about a topic. This passion brings extreme focus and motivation but may result in irrational dedication to a dead-end cause. We have all heard about or met an entrepreneur who has spent their life savings on a product that nobody wants. Knowing what ideas to pursue and how far to take them require a level of business savvy, which may be blinded by the passion and motivation of an entrepreneur.

Time and financial management is another challenge area for entrepreneurs. Guy Kawasaki states, “As a rule of thumb, when I see a projection, I add one year to delivery time and multiply revenues by 0.1.” (Ref. http://blogs.hbr.org/anthony/2012/08/the_planning_fallacy_and_the_i.html). Many great ideas never make it to market or lose out to competition due to poor time and financial management.

Entrepreneurs have it easier when it comes to culture, agility and accountability. Passion, motivation and size of entrepreneurial teams are conducive to the positive cultural attributes many larger organizations would love to duplicate. A committed team, where job descriptions, unions, structures, hierarchies do not exist, is capable of creating miracles.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

Your Organizational Culture Determines How You Innovate on Mature Products/Markets

Everybody can visualize the organizational culture of a start-up company. A small group of dedicated, motivated people working shoulder-to-shoulder with visionary founder(s). Things are humming and dynamic. How about the organizational culture when the product matures and is adopted by a larger market segment? How does that culture contribute to further innovation?

Let me first frame the conversation using Geoffrey Moore’s four innovation zones, introduced in his book Dealing With Darwin. Moore maps these four zones to his famous market adoption curve.

Geoffrey Moore's Four Innovation Zones

Geoffrey Moore’s Four Innovation Zones

At the leading edge of the curve is Product Leadership, which corresponds to disruptive innovation. At the tail end, there is Category Renewal. In this post, I will focus on the middle section and discuss the role of organizational culture in the company’s ability to innovate in that area.

Geoffrey Moore identified two main innovation categories for mature products/services:

  • Customer Intimacy refers to improving the value of the product/service to customers,
  • Operational Excellence is about improving operational efficiency to gain cost advantage over competitors.

While many organizations claim or want to do both, typically their culture is geared towards one or the other, not both. Improving customer intimacy requires an outward looking culture whereas the attention is inside when it comes to operational excellence. In today’s bottom-line driven approach, operational excellence is where most organizations focus because:

  • One can readily quantify goals: Cost of materials, taking waste out of operations, automating processes are all quantifiable and easily understandable. Leaders can set goals (eg. “reduce warehouse floor usage by 50%”) and monitor progress.
  • Improvements are internal: Improvements are done in operations behind closed doors. They are under the control of leaders of the organization.
  • There is little risk of public failure: What happens in the company stays in the company. Naturally, operational changes may impact customer experience but, for the most part, the outside world has limited visibility to how operations are run.

Customer intimacy, on the other hand, requires a different culture, which emphasizes continuous effort to better understand customers and respond to their evolving needs. True customer insight comes through walking a mile in the customers’ shoes, understanding their pain points and improving the product/service to eliminate these pain points. This approach conflicts with operational excellence as it is outward looking, ambiguous, risky and potentially costly.

In summary, customer intimacy and operational excellence require two very different organizational cultures to do well. These cultures are inherently in conflict with each other and should be managed well to be successful. Otherwise, typically operational excellence camp wins at the expense of better customer experience.

I welcome your comments on my blog. If you have specific questions, please feel free to contact me at ferhan@ferhanbulca.com.

Is Your Skin Thick Enough to be an Intrapreneur?

Intrapreneurs are a rare breed of people, who are motivated by opportunities to lead corporate growth. In doing so, they typically take inordinate career risks because they are driven by “doing the right thing to create value” but such value is generated over a time frame which is mostly outside their control.  They are different from entrepreneurs because they are not doing it for their own companies.

Their personal benefits, if business becomes successful, are typically quite limited. On the flip side, intrapreneurs enjoy access to better resources and, unlike entrepreneurs, they are not encumbered by cash-flow issues. Larger organizations that employ intrapreneurs typically have deeper pockets than most entrepreneurs do.

To be successful, intrapreneurs need to change the company culture, do things differently, do it efficiently, shake the boat, and gain internal support to get things done. That is a tall order even in change-friendly organizations. The way intrapreneurs operate typically do not resemble the way daily operations work. This difference is necessary to achieve new and innovative results but it is also at odds with the typical results-driven, bottom-line focused organizations.

Abbie Griffin, Raymond L. Price and Bruce A. Vojak call such people “Serial Innovators” in their book with the same title (you can find a review of the book at http://sloanreview.mit.edu/the-magazine/2012-summer/53419/what-it-takes-to-be-a-serial-innovator).  In spite of the enormous value intrapreneurs bring to their organizations, the authors report that a number of the serial innovators they interviewed thought that if they were just starting out today, their companies would not hire them. Fortunately, there are a good number of intrapreneurs who are not discouraged by this observation and continue to be motivated to bring in new and exciting businesses to life.

I welcome your comments on my blog. If you have specific questions, please feel free to contact me at ferhan.bulca@intrascope.ca.

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