• 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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Which One Has Priority: Strategy or Execution? How About Both?

An article I read in strategy+business prompted me to write on a topic I have been sitting on for some time. The article I am referring to is titled “Strategy or Execution: Which One is More Important? (http://www.strategy-business.com/article/cs00005?gko=733e9&cid=20121009enews&utm_campaign=20121009enews).

In a nutshell, the authors heard from business leaders that “execution is more important than strategy.” The authors’ response to this input is that “you cannot have good execution without good strategy.” First, let me state that I fully agree with the arguments of the authors. I guess I fall into the category of “seasoned strategists” they refer to.

Having said this, the authors’ observation and, possibly, frustration are no different from what I feel when I discuss innovation with business leaders. A critical component of designing an innovation program for an organization is to understand and articulate its business strategy. And, articulating a strategy goes beyond slogans and animated speeches. Enough has been said about what strategy is and how to build one. Just like everything else, building a solid strategy is lots of hard work. But, I am not going to dwell on strategy-building in this posting. Instead, I want to discuss the fact that business leaders think that they have to make a choice between strategy and execution. In fact, they have no choice. If they take their fiduciary responsibility seriously, that is.

Business leaders have two distinct responsibilities:
1) Successfully compete today (i.e., make money today)
2) Position the organization for future success (i.e., make money tomorrow)

Focus on execution means business leaders clearly understand the importance of (1) but leaving strategy behind means they do not get the importance of (2). The typical defence is “if the business does not survive today, there is no tomorrow.” I think this thinking is the kiss of death for businesses. Unfortunately, businesses build their organizations around execution and they keep perfecting it. It is tangible, gives immediate results and makes the leaders look good. The problem arises when the concept of strategic innovation comes to picture.

First, unclear or poorly articulated strategies result in disjointed innovation attempts. These initiatives are typically misguided and produce very poor results. In some cases, they may even hurt the business.

Second, trying to perform strategic innovation in an execution-minded environment and organization is doomed for failure. And, these are not the learn-from-your-failures type of failures one would expect to have in innovation initiatives. These are “I told you to not mess with my department” type of failures, which only create frustration and animosity. In my experience so far, execution and strategic innovation do not mix. Until a level of market success delivered by the innovation initiative, it should be kept outside the execution engine of an organization. Unfortunately, my experience is in line with the authors of the article I mentioned above. Organizations know how to build execution excellence but they do a very poor job in building strategic innovation excellence. In fact, it is not a choice between the two. Great organizations have to do both equally well.

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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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.

 

Large Companies and Innovation – An Oxymoron?

For long, innovative and new products are associated with entrepreneurs who pursue their passion and succeed. Many think that large companies get caught up in their routine operations and are not good sources of innovative solutions.

In fact, large companies have a few advantages over their start-up counterparts to create innovation. Scott Anthony published an article to “…call to arms for corporate innovators to seize the opportunities that only a big company can realize” (http://blogs.hbr.org/anthony/2012/09/how_big_companies_can_save_inn.html?awid=6166991183274468738-3271). Scott discusses three questions companies should be asking themselves to remain active in the innovation playground. In addition to asking these questions, companies should leverage the strengths that only large companies have:

1. Access to resources

Large companies have the most important resource for innovation: cash. Many entrepreneurial activities never come to fruition because of cash-flow issues. This is less of an issue in a large organization, where mature financial management is the norm.

Large companies have people, tools, facilities and partners that are difficult for start-ups to establish. In addition, international networks of large organizations enable them to quickly and effectively assess the value of their innovations, which again is a luxury for entrepreneurs.

Finally, large companies can get the attention of distribution channels much more easily than a start-up can.

2. Established brand

Think of the difference between Google introducing a social interaction medium versus a No-Name start-up doing the same. Even if Google+ is not much of a success so far, it still has attracted a number of users, who are trying it only because it is from Google. On the other hand, we have never heard of many Facebook-like tools being created by start-ups.

A large company can put its existing brand power behind a new product or service it is introducing. An established brand does not make a sloppy product successful but it certainly ensures that the new product gets some much needed air time with potential customers.

3. Talent acquisition

I recently worked with a client, which was struggling to attract talent to a new business they wanted to introduce. While the client had a viable product, they were having difficulty convincing top-talent join their ranks because the company was not known as a development company. In contrast, IBM, for example, would have no difficulty attracting the top talent for new business ideas they are working on.

4. Create and maintain momentum

Large organizations can dedicate resources to new development while start-up entrepreneurs struggle with basic needs of life. For example, an aspiring entrepreneur I know had to pause pursuing his passion in commercializing a medical device in order to focus on making some money to be able to pay his mortgage and put food on the table. By the time he secures sufficient savings to go back to his passion, he will have lost his momentum. In the worst-case scenario, he may even lose all his progress if a competitor beats him to market.

In closing, I echo Scott’s appeal to large organizations. There is tremendous opportunity to take the center-stage in innovation by learning from successful entrepreneurial practices and executing them in large organizations by leveraging above strengths.

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.

Have a vision? Follow your dream…with discipline!

About five months ago, I had a social meeting with a long-time friend and his son. My friend wanted his son to meet with me and discuss his thoughts for his future. When we met, the dynamics was so familiar. The father worried about his son’s future, wanted him to get a regular job and so on. The son, on the other hand, had different ideas. More importantly, he had a passion: video games. Most of the night went as one would expect. As we were walking out of the place, the father left us alone for a few minutes. Those few minutes made it obvious that this young guy was no ordinary kid. In addition to being very clear about what his passion was, he also had a game plan to convert his passion to a business.

Fast forward to a couple of days ago… I met my friend (the father) again and listened to the accomplishments of his son in a few short months. He had set up a YouTube channel, broadcasting his expertise on a video game. He beat the game before the provider made changes to it to make it less challenging for the average player. He interviewed on BBC, no less, and has thousands of followers of his video updates. Some of his YouTube videos attracted millions of visitors. And, his efforts started to bear fruit. The month before, he generated what I would call serious revenue for his start-up.

At the second meeting, my friend was no longer worried about his son. Instead, he expressed his admiration for the son’s passion and discipline. And, this is the important point: discipline.

What made this guy successful is the combination of his passion and his discipline. He clearly articulated what he envisioned, which was an achievement in itself. But, he also planned and executed every step to get there. When I was listening to the events of the past months from his father, I was remembering the things the son had told at our first meeting. It was clear that his success was not incidental, it was carefully thought-out and impeccably executed.

My hat is off to this kid!

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

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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