 Our next topic is a challenge. It's a challenge on invincible companies. And to present that, I want to invite Alex Osterwald to the stage. Alex is the creator of the business model Canvas. And one of the most remarkable things of Alex was his fantastic ability to transform something quite complex in a very powerful educational tool, like the business model Canvas. So now I will challenge you, Alex, to turn our company's invincible in 15 minutes. OK, the stage is yours. Thank you, Alex. Thank you, thank you. OK, so if we can have my slides. I want to start very quickly, because you've been listening quite a bit, thinking a lot. I want you to quickly interact with your seat neighbor and ask, should everybody in your organization be an innovator? In an age of uncertainty, sometimes we hear CEOs say, everybody needs to be an innovator. So discuss for a minute. I'm giving you one minute of my 15. Discuss, should everybody be an innovator? Let's go. One minute. OK, OK. Let's continue together. Let's continue together. So can everybody listen? So I'll give you my opinion. Now right or wrong, I'll just share my opinion. I think yes, and I think no at the same time. So let me draw this what I mean with this. So basically the trajectory of a company is very simple. Every company starts with an idea, even if you're Nestle and 150 years old. And the goal is to build a company. So every organization was once a startup. And sometimes we think, OK, when we go from idea to business, so here, idea to business, we need to make a business plan. The problem is business plans are the worst possible document for new ideas. So anybody here who has written a business plan, hands up if you've ever written a business plan, you've wasted your time when it was about a new idea. I'm not talking strategy implementation when you build new factories, expand the sales force. But innovation looks like this. It's ups, it's downs, you make progress, then your customers say they don't like your project, your product, then your bosses cut your funding, and it goes backwards. And maybe potentially if you survive, you have a real business. And there's a whole graveyard of dead ideas that all look good in the spreadsheet and had wonderful, wonderful PowerPoints. So this is what we call the explore phase of building a company. Once you have a company and most of you here in the room, you behind this phase, well, we have a big corporation. So if you wondered what this drawing was, this was a, let's say a $20 billion business, okay? Has flags on the roof and so on, okay? You don't have flags when you're just a billion dollar business. Now what happens to this DNA that we had during the innovation, exploration, or entrepreneurial phase? It goes away because here we focus on exploit. We can call it search here as the verb here, it's manage. Okay? Now we forget to a certain extent how to explore because we found a successful business model that we're scaling or you expand it into different business divisions and all you focus on is making this business here better, which is good, that's not a bad thing. It's just that when the world is changing very rapidly, you probably want to be able to do this at the same time. Now, when you have KPIs that are focused on managing an exploitation and you apply them to innovation, what happens? You kill ideas. So now back to the question, so here we need something else. Back to the question, should everybody be an innovator? Well, there are different types of innovation. Here we have efficiency innovation, better processes, that's good, but over here we have growth innovation, which is all about entrepreneurial action. Those are two different skill sets. So let me just quickly show you what I mean with this. We have two different universes and Rita was talking about this in one of the examples already. We have an exploit world. We have an explorer world and we have a portfolio of businesses. Oh, this is not good. Can we get this on the screen somehow? Well, okay. So over here we have a portfolio of existing businesses. Here we have a portfolio of new ideas. This is entrepreneurship that is management. That is very different. Now I'm just gonna walk you through it since you can't probably see everything. The focus on the right hand side is cost cutting, bringing in management consultants, et cetera. That's not bad, but you also need to focus on growth. Different kind of innovation. Investment philosophy is different. Stock market and dividends and here more venture capital style investment. Different universe. When it comes to culture and processes, same thing. Here we need people who are comfortable with uncertainty, with ambiguity, with not having the data. And Rita was saying, for example, well, if you don't have the data, then don't stop fighting. You need to experiment to figure out that data. Over here where we know the businesses, where we know the customers, there we can talk about data because we produce it. So different universes. And then people skills, probably these are not the same people. Now there's not a brick wall in between. You have people navigating between the two worlds, but some are more entrepreneurial and I think corporate entrepreneurship we've been talking about it for a long time is now really starting to become something serious. The question is, can we do it? Over here, we have rigorous processes, detailed with procedures, that's good. You don't want somebody managing a nuclear plant to become too much of an innovator. We have rigorous processes and checklists, okay? So, now we came up with something good that it fits on the screen here. So that we call, and with my co-author that we call the business portfolio map. Where you look at more traditionally, your existing portfolio of businesses and P&Ls, but over here you have a whole new universe of new ideas. And we'll see how they function differently. Innovation here is about improving your businesses, going from product to services for example, over here, it's really about reinvention. Now, if we look at this here on this axis, we have dollars, if this fits in here, same here, dollars, okay? Profitable business on top, less profitable business on the bottom, here the same thing, profitable on top, less profitable at the bottom. Here at the bottom axis we have risk. When a business is very successful, mature and protected, it's up here. But then disruption happens, Kodak for example, got disrupted by digital film. And they weren't able to go back up. And they had nothing over here to save them. Whereas Fujifilm actually diversified into something else, into cosmetics. Because it turns out film, aging film, has similar behaviors and requires similar skills and technologies than aging skin. So they diversified. One company became successful or stayed successful, had to reinvent itself, the other company went bankrupt. So you need to more and more manage these two types of portfolios. This is not a new phenomenon, but it's getting stronger and stronger. Okay, now little exercise for you. So let's say we want to create in our companies a new multi-billion dollar growth engine. Just like Amazon did with Amazon Web Services. That's your strategic innovation, okay? How do we implement that? Question to you is, how many projects would you need to invest in as a company? How many, let's say million dollar investments would you have to make? In how many projects to create one multi-billion dollar success? Meaning, up there we want to build something, remember we have profitable and protected, we want to build a multi-billion dollar growth engine. How many projects here, sorry that it was cut off, how many projects up here would we have to invest in to create one success? How many of those projects will fail? So if we say 10, $10 million, 10 projects, each one one million, that's $10 million. How many will fail and how many will know some success? I'll give you a minute to discuss with your seat neighbors how many million dollar projects would you have to invest in to create one so-called unicorn? And how many of those will fail? And how many will be maybe 100 million or 50 million dollar business? Let's go, see if somebody can figure it out, one minute. Okay, let me see. What are your guesses? What would you put in the upper left hand corner? How many multi-million dollar projects would you need to invest in? How many projects? 10, 100, I heard 50, okay? Other guesses? 1,000. 1,000, okay, so that's a billion dollars, okay? And you're gonna, how many of those are gonna fail? You're investing in 1,000 projects, 80 are gonna fail. So you're just burning 800 million dollars. And your companies are fine with that? Yes. Okay, other guesses? We have 1,000, we have 50, any other guesses? No risk takers in the room, okay? Well, I'll give you the answer. I guess that's what you're waiting for. So the number here is 250 projects that you need to invest in. 162 will be complete failures. That means they won't return any money on investment, complete failures. 87 of those will know some success, but they won't become a multi-billion dollar growth engine. Now what I want you to keep in mind here is that it's impossible to pick the winner to get to that number up there, that one winner. And it's not a surprise that Amazon can build growth engines because they actually have failure, not as a strategy, but as, oops, technology, God's not with me, as an important aspect of their strategy. So where do I take these numbers from? From early stage venture returns. So if you look at how many investments completely fail, you actually have 65% that don't return investment. Zero to one X return, meaning I put in 100, I get less than 100 back. Then you have one out of four that have a one to five X return. I put in 100, I get maximum 500 back. And that usually just makes up for the losses on the left-hand side. So where's that last unicorn? Well, it's four out of 1,000 investments that become a home run, meaning more than a 50 X return. And that would probably not even get us to a multi-billion dollar growth engine. And what I want you to keep in mind here is, these numbers mean that it's not possible to pick the winner. If an entire industry, venture capital, or early stage venture capital can't pick the winners, why do we believe we can make strategy for new growth engines and pick the winners? We can't. There's some aspects of strategy that we can predict, and some we really can't. So that's why you have companies like Amazon, and there's more and more that are becoming Amazon-like, that put the acceptance of failure at the center of their strategy. And Bezos likes to say, failure is something we're really good at. Amazon is the best place in the world to fail. But to finish up, failure over here, when you're expanding your sales force, when you're building new warehouses or managing factories, is not an option. Here we're talking different kinds of innovation, process innovation. Growth innovation requires a different approach. 250 projects down here that we de-risk in order to pick those that will win. So in 15 minutes, if you can build that, and it is possible, you just need to copy Amazon. And that's how you do it. It does require change in culture, in processes, in people, and definitely in leadership and strategy execution. So I hope I could give you something in 15 minutes. Thank you very much.