Implementing Innovation in an Uncertain Environment

Five key principles to implement realistic and effective innovation strategies in times og high uncertainties. A keynote for FP Innovations a private not-for-profit organization that specializes in the creation of solutions in support of the Canadian forest sector’s global competitiveness.

Transcript

1. Implementing Innovation in an Uncertain Environment Key strategies and enabling factors for successful innovation adoption +
2. Implementing Innovation in an Uncertain Environment Philippe Méda Close to 20 years advising established brands and upstarts on disrupting markets, or weathering major storms. Europe North America China Japan
3. Implementing Innovation in an Uncertain Environment 1. DON’T LISTEN TO EXPERTS Survival Principles 3. SPOT GREY SWANS & CANARIES 4. INVEST IN THE LONG CYCLES 5. HARVEST RISK 2. RELAX, IT’S BUSINESS AS USUAL
4. Implementing Innovation in an Uncertain Environment 1. DON’T LISTEN TO EXPERTS 3. SPOT GREY SWANS & CANARIES 4. INVEST IN THE LONG CYCLES 5. HARVEST RISK 2. RELAX, IT’S BUSINESS AS USUAL Survival Principles
5. 1. DON’T LISTEN TO EXPERTS
6. 1. DON’T LISTEN TO EXPERTS Motorola 8000 X (1985) In the early 1980s, AT&T asked McKinsey to estimate the number of cell phones in use worldwide at the turn of the century. They concluded that the total market would be about 900,000 units, which persuaded AT&T to pull out of the market. By 2000, there were 738 million people with cellphone subscriptions. © innovation copilots 2021 1. DON’T LISTEN TO EXPERTS
7. This [Apple] watch has no sex appeal. It’s too feminine and looks too much like the smartwatches already on the market. To be totally honest, it looks like it was designed by a student in their fi rst trimester. JC. Biver, LVMH [ Confidential - CHANEL 2024 ] 1. DON’T LISTEN TO EXPERTS
8. [ Confidential - CHANEL 2024 ] 1. DON’T LISTEN TO EXPERTS
9. 1. DON’T LISTEN TO EXPERTS 🧐
10. 1. DON’T LISTEN TO EXPERTS Intel Capital's Intel Education Accelerator Closure Date: 2017 Cisco Entrepreneurs in Residence Closure Date: 2018 Microsoft Ventures Closure Date: 2019, redirected e ff orts to “other initiatives” Unilever Foundry Closure Date: 2019 General Electric (GE) Ventures Closure Date: 2019 Orange Fab Closure Date: 2020 Disney Accelerator Closure Date: 2020 BMW Startup Garage Closure Date: 2021 Barclays Accelerator Closure Date: 2022
11. 1. DON’T LISTEN TO EXPERTS We are in a period where no one can “read” the future anymore. Not even a little. Predictions and forecasts won’t work. This is no longer the time to bet everything on a single, grand 5-year vision. Markets are shifting in real-time, with threats emerging from nowhere— and unexpected opportunities right alongside them.
12. Implementing Innovation in an Uncertain Environment 1. DON’T LISTEN TO EXPERTS 3. GREY SWANS & CANARIES 4. INVEST IN THE LONG CYCLES 5. HARVEST RISK 2. RELAX, IT’S BUSINESS AS USUAL Survival Principles
13. 2. RELAX, IT’S BUSINESS AS USUAL
14. 2. RELAX, IT’S BUSINESS AS USUAL PUZZLES Optimal solution Zero-sum games Obvious > Complicated Known knowns and unknowns Resources / Time Best practices Customers know… PREDICTIVE
15. 2. RELAX, IT’S BUSINESS AS USUAL PUZZLES Optimal solution Zero-sum games Obvious > Complicated Known knowns and unknowns Resources / Time Best practices Customers know… PREDICTIVE MYSTERIES Good enough solutions Open systems Complex > Chaotic Unknown unknowns Intuition / Time Emergent practices Customers don’t know either… ADAPTATIVE
16. 2. RELAX, IT’S BUSINESS AS USUAL Pierre Wack (1922–1997). French oil executive who was the fi rst to develop the use of scenario planning in the private sector, at Royal Dutch Shell’s London headquarters in the 1970s. So successful was he that the Anglo-Dutch oil giant was able to anticipate not just one Arab-induced oil shock during that decade, but two.
17. 2. RELAX, IT’S BUSINESS AS USUAL 1. Real Options Real options borrows logic from fi nancial markets and venture capital, applying the concept of “buying the right, not the obligation” to pursue a future opportunity. 2. Innovation Portfolio Spread and manage strategic bets according to different time horizons, uncertainty levels, and potential impact. 3. Probe–Sense–Respond Run fast, small experiments that generate feedback from the system. These “probes” aim not to validate a business case but to surface signals that help you understand how the system behaves (sense). 4. Strategic Precommitments Get a future access to a market, capability, or partner without commiting to it by securing access to a technology platform, participating in a regulatory sandbox, or entering a limited partnership 5. Discovery-Driven Planning Rather than assuming that a project will succeed and then creating a roadmap to get there, you begin by de fi ning what success would look like and then working backward to map all the assumptions that must be true for it to happen. 6. Optionality-Driven Design Instead of building rigid solutions from the get-go or trying to learn what customers would want, you design business models, products, and systems in a way that leaves room to maneuver. being sure you'll be able to bring it there with minimal effort once the answer is available.
18. 2. RELAX, IT’S BUSINESS AS USUAL LAUNCH 120 30 5 1 My master plan is to launch our best idea from 2022 next year in the market. aka. The dumbest time machine ever. IDEAS PROJECTS POCs
19. 2. RELAX, IT’S BUSINESS AS USUAL PORTFOLIO A strategically curated collection of diverse projects that provide a wide range of opportunities and pathways to achieve innovation goals. This approach is designed to maximize fl exibility and adaptability in response to changing market conditions, unpredictable technological advancements, and emerging trends.
20. 2. RELAX, IT’S BUSINESS AS USUAL
21. 2. RELAX, IT’S BUSINESS AS USUAL PC Gaming Autonomous Vehicles Cryptos AI
22. 2. RELAX, IT’S BUSINESS AS USUAL These tools are robust and effective at dealing with high uncertainties and chaotic markets. Most of them derive from fi nancial strategies for high-risk investments (portfolios, options, …) or sectors like oil & gas, pharmaceuticals. The tools and mindset needed for innovation aren’t more complicated—they’re just less commonly used.
23. Implementing Innovation in an Uncertain Environment 1. DON’T LISTEN TO EXPERTS 3. SPOT GREY SWANS & CANARIES 4. INVEST IN THE LONG CYCLES 5. HARVEST RISK 2. RELAX, IT’S BUSINESS AS USUAL Survival Principles
24. 3. GREY SWANS & CANARIES Grey Swan are events that, while anticipated by experts, are dismissed as unlikely because they are at the farthest edges we can imagine.
25. 3. GREY SWANS & CANARIES 3. GREY SWANS & CANARIES
26. 3. GREY SWANS & CANARIES Grey Swans Canaries
27. 3. GREY SWANS & CANARIES Canary Canary
28. 3. GREY SWANS & CANARIES 1.Trade retaliation or tari ff escalation (e.g., U.S. Softwood Lumber Disputes 2.0) Trigger: A change in political leadership or a major trade rift. Second-order impact: Overnight loss of market access, price dumping, inventory glut, sawmill closures, and regional economic fallout in Canada. 2.Breakthrough in engineered wood substitutes (e.g., advanced biomaterials or hempcrete) Trigger: Mass adoption by construction giants or mandates in carbon-reduction regulations. Second-order impact: Structural shift in demand; devaluation of traditional timber; reallocation of R&D funds; stranded assets in old sawmills. 3.Cyberattack on forestry logistics or supply chain platforms Trigger: Coordinated ransomware on harvest planning systems, port authorities, or railway logistics. Second-order impact: Disrupted shipments, delayed exports, breach of customer contracts, insurance premium spikes, reputational damage. 4.Legal recognition of Indigenous sovereignty over forested land Trigger: A landmark court ruling or constitutional amendment. Second-order impact: Halted operations in large areas; renegotiation of permits and royalties; joint ventures required; reputational and investor pressure to comply with new stewardship models. 5.Sudden insect or fungal infestation (non-native species) Trigger: Global warming opens northern ecosystems to new invasive pests (e.g., Southern pine beetle expansion). Second-order impact: Massive forest loss, reduced timber quality, accelerated harvest to salvage value, long-term regeneration costs. Grey Swans
29. 3. GREY SWANS & CANARIES 6.Collapse of the carbon credit market or reversal of forestry o ff sets legitimacy Trigger: Scandal or academic study discrediting forest carbon offsets' effectiveness. Second-order impact: Loss of a parallel revenue stream; damaged ESG credentials; forced operational transparency. 7.Bankruptcy or collapse of a major export buyer (e.g., Chinese real estate or construction giant) Trigger: Credit crisis or national policy pivot. Second-order impact: Canceled orders, plummeting spot prices, mass redirection of exports into already saturated Western markets. 8.Disruptive regulation on water use or biodiversity Trigger: UN or federal mandates linked to planetary boundaries or the Kunming-Montreal Global Biodiversity Framework. Second-order impact: New land-use restrictions; reshaped licensing requirements; expensive retro fi tting of operations to meet compliance. 9.Massive labor disruption due to AI/automation pushback Trigger: Legislative limits or social pushback against AI in heavy machinery and forest mapping. Second-order impact: Delayed modernization; skills mismatch; cost pressures; heightened risk of safety incidents. 10.Emergence of a pan-Canadian climate risk pricing mechanism tied to real-time satellite forest monitoring Trigger: Technological convergence + regulatory will. Second-order impact: Constant pricing volatility based on “risk scores”; complexity in fi nancial forecasting; higher premiums or capital lock-ins tied to natural capital metrics. Grey Swans
30. 3. GREY SWANS & CANARIES Grey Swans are not inconvenient data points anymore. Treat them as potential futures to be taken seriously. Outliers from last year’s models aren’t improbable anymore. Unusual patterns, fringe behaviors, or odd market moves can reveal emerging dynamics that mainstream players will systematically overlook.
31. Implementing Innovation in an Uncertain Environment 1. DON’T LISTEN TO EXPERTS 4. INVEST IN THE LONG CYCLES 5. HARVEST RISK 2. RELAX, IT’S BUSINESS AS USUAL 3. SPOT GREY SWANS & CANARIES Survival Principles
32. 4. INVEST IN THE LONG CYCLES Software platforms Hype Innovation Market Weeks Months 3 years 5 years Short Cycles (Superficial)
33. 4. INVEST IN THE LONG CYCLES Energy and laws Physical infrastructures Software platforms Hype Innovation Market Weeks Months 3 years 5 years 10 years 30 years Short Cycles (Superficial) Long Cycles (Transformational) Bottlenecks
34. 4. INVEST IN THE LONG CYCLES
35. 4. INVEST IN THE LONG CYCLES S&P Global Market Intelligence (February, 2021)
36. 4. INVEST IN THE LONG CYCLES
37. 4. INVEST IN THE LONG CYCLES
38. 4. INVEST IN THE LONG CYCLES
39. 4. INVEST IN THE LONG CYCLES
40. 4. INVEST IN THE LONG CYCLES There are always underlying market forces that move slowly but predictably, powered by inertia and long-term momentum. Demographics, geopolitics, climate, or major industrial investments are still easy to spot and understand. Even in turbulent conditions, there are slow-moving, long-cycle drivers with reliable directionality.
41. Implementing Innovation in an Uncertain Environment 1. DON’T LISTEN TO EXPERTS 3. SPOT GREY SWANS & CANARIES 4. INVEST IN THE LONG CYCLES 5. HARVEST RISK 2. RELAX, IT’S BUSINESS AS USUAL Survival Principles
42. 5. RISK IS AN ENGINE RISK is the e ff ect of uncertainty on objectives that can bring a positive or negative deviation from what is expected.
43. 5. RISK IS AN ENGINE EXPECTED ROI A breakthrough technology enables the creation of highly differentiated products. A new experience is crafted, with its key moments mapped and aligned to a clearly de fi ned target audience. A core internal process is now optimized—whether in speed, cost, uptime, or environmental impact. 1
44. 5. RISK IS AN ENGINE EXPECTED ROI A breakthrough technology enables the creation of highly differentiated products. A new experience is crafted, with its key moments mapped and aligned to a clearly de fi ned target audience. A core internal process is now optimized—whether in speed, cost, uptime, or environmental impact. The organization masters a new technology, deepening its understanding and unlocking future applications. A strategic partnership is formed, expanding opportunities through tech licensing or extended market reach. Emerging market behavior is decoded and becomes a playbook for activating adjacent markets. Brand visibility and technological credibility rise above competitors, attracting new customers and strengthening market position. “RISK” ROIs 1 3
45. 5. RISK IS AN ENGINE A breakthrough technology enables the creation of highly differentiated products. A new experience is crafted, with its key moments mapped and aligned to a clearly de fi ned target audience. A core internal process is now optimized—whether in speed, cost, uptime, or environmental impact. The organization masters a new technology, deepening its understanding and unlocking future applications. A strategic partnership is formed, expanding opportunities through tech licensing or extended market reach. Emerging market behavior is decoded and becomes a playbook for activating adjacent markets. Brand visibility and technological credibility rise above competitors, attracting new customers and strengthening market position. “RISK” ROIs 3 ✅ 🤔
46. 5. RISK IS AN ENGINE Linear project fl ows will not keep pace with market complexity. Investments should be judged by their strategic contribution, not just plain execution milestones. Each new project should have 3 “Risk ROIs” beyond its ideal objective.
47. Implementing Innovation in an Uncertain Environment THANKS! philippe@icopilots.com