Why and How Establishing an Innovation Culture is a Top Agenda Item for Global CEOs CEO Circle Seminar 11 th February 2016 Professor Steve Burdon 1 ©Steve Burdon & Criteria Research Pty Ltd

1. Establishing a Winning Innovation Enterprise

2. Disruptive Technology -The Next Tsunami 2.1. ERA 1: Commercialisation of the Web – % growth in productivity; 30% increase in GDP (USA) Supply Chain Mgt and Business Model Disruption 2.2. ERA 2: The Second Machine Age – Software revolution - “Web services and products have become so evolved, cheap and ubiquitous that they can easily be combined and recombined.” 1 AI – Accelerating development of artificial intelligence. EG IBM’s Jeopardy quiz winning computer Watson (1) Brynjolfsson, E., & McAfee A., 2014, The Second Machine Age, W. W. Norton & Company; 1st edition 3

2.3. Technology Trends for

2.4. What could be the Impact? 5

2.5. Major disruption to Legacy Business Models 6

2.5. Major disruption to Legacy Business Models (con.) 7

Source: Publicly available financial data (2009/2010) Culture and Performance Consistent superior performance on multiple financial metrics for companies recognized Internally and Externally as innovative Validates historical research on linkage between employee engagement and business results 8 3. Building a Strategic Approach to Innovation 8

3.2. The Strategic Importance of Technology Expected share of organisations overall growth that will result from digital efforts in the next 3 years 9

3.4. Method of Growth by Innovation Type 10

4.1. Importance of Organisation Design and Management Create an agile organisation Create a new business approach Create new organisation design 4. Prerequisites for an Innovation Culture 11

4.1. Importance of Organisation Design and Management Create a sense of urgency Maintaining a Winning culture 1 Balancing innovation with business results 1 (1) Kaplan., J quoted in 2015, ‘Learning from Google’s Digital Culture’, McKinsey Insights 12

4.2. The Changing Requirements of Leadership Four kinds of behaviour account for 89% of leadership effectiveness (1) Feser, C., Mayol, F., Srinivasan, R., 2015, ‘Decoding Leadership: What Really Matters’, McKinsey Quarterly 13

4.2. The Changing Requirements of Leadership (cont.) Personal qualities of tomorrow’s leaders: 14

5. Requirements for a Successful Innovation Culture 5.1. Ten Key Requirements 15

5.2. Direct Role of C-level and Boards in Innovation 16

Innovation distinguishes between a leader and a follower- Steve Jobs. Is Your Enterprise Ready For Leadership? 17