cfo innovation conference, keeping creativity from becoming chaos, prize foundation
TRANSCRIPT
David Donell,
Chief Financial Officer
CFO Innovation Conference
Keeping Creativity from
Becoming Chaos
Raymond Orteig offered $25K
prize (~$5M today) for first
flight from New York to Paris
Impact:
Launched the international
airline industry
Grew airline passenger traffic
30x
Increased # of aircraft 4x
Why Did He Do It?
In 1996, the $10 Million Ansari X PRIZE Opened Up a New Era…
26 privately funded teams
Generated more than $100 million in
R&D investment
2 flights in 2 weeks
Impact:
Launched the billion dollar private
space flight industry
SpaceShipOne now hangs
among history with the Apollo
11 Capsule and the Spirit of St.
Louis in the Smithsonian
National Air & Space Museum,
the largest air and space
collection in the world.
And History Was Made…
X PRIZE Design Attributes
Target area that is „stuck‟;
market failure
Define a problem, not a solution
Assure there is a “back end
business”
Drive new inventions and
innovations
Open to teams worldwide
Attract maverick thinkers
Open new areas of
research/action
Launch businesses &
industries
Encourage taking intelligent
risk
Not just ideas or talk;
implementable
X PRIZE Results
Our Model
$2.5 million
seed money
$10 million
prize money
$100 million
by teams
$1 billon+
private space
industry
Education
Energy &
Environment
Life Sciences Exploration
Global
Development
Presented By
Presented By
Prize Groups
XPF Track Record
More than $70 million in
incentivized prize money
combined.
More than $500 million in
R&D investment.
AWARDED
• $10M Ansari X PRIZE
• $2M Northrop Grumman Lunar Lander X CHALLENGE
• $10M Progressive Insurance Automotive X PRIZE
• $1.4M Wendy Schmidt Oil Cleanup X CHALLENGE
LAUNCHED
• $30M Google Lunar X PRIZE
• $10M Archon Genomics X PRIZE presented by Express Scripts
• $10M Qualcomm Tricorder X PRIZE
• The Heritage Provider Network Prize
• XPF is a donor/sponsor funded (non-endowed)
501(c)(3) education nonprofit
• Funding comes from four primary sources:
– Donors
– Other Grant Making Foundations (e.g. Gates Foundation)
– Government
– Corporations
• Work is divided among four areas:
– Prize Development (R&D): sources, selects, designs competitions
– Prize Operations: operates & awards prizes
– Foundation Operations
– Fundraising
• Staff of 45 employees
Organizational Structure & Funding
VISIONEERING
Process for defining the
Grand Challenges and
designing competitions to
solve them.
Includes a methodical
prize development
process with thought
leaders, innovators and
stakeholders.
Prize Design Platforms
Prize Development
Anchored in Open
Collaboration
Allows many external
constituencies to contribute
to the process.
Not a grant or RFP for
prizes; but designed in an
organic way.
Prize
Ideas
XPF
Website
General
Public
XPF Staff
Thought
Leaders
X PRIZE
Labs
Advisory
Board
Donors
Board of
Trustees
Autonomous Auto
X PRIZE
Purse: $10 million
Grand Challenge:
There are 1.2 million
automotive-related deaths
each year worldwide.
Goal:
Increase automotive
safety, reduce commuting
time, and greatly reduce
fuel consumption.
Tri-State Carbon
X PRIZE
Purse: $10 million
Grand Challenge:
No company has
successfully commercialized
a carbon utilization
technology.
Goal:
Create useful and valuable
products from the coal plant
effluent.
Ocean Exploration
X PRIZE
Purse: $10 million
Grand Challenge:
95% of the ocean is
currently unexplored.
Goal:
Push the frontiers of ocean
exploration for conservation
and resources.
Education Game
X PRIZE
Purse: $10 million
Grand Challenge:
There is a global shortage
of great teachers.
Goal:
Create a new generation
of online/mobile
educational games that
prove to teach.
Cryopreservation X PRIZE
Astroid Deflection X PRIZE
Solar Pavement X PRIZE
Bionics X PRIZE
Cookstoves X PRIZE
• Staff & Executive Visioneering
• Operational Planning & Budgeting
• Balancing the Audacious with the Achievable
Annual Planning
Process
• Part of a 360 management initiative
• Staff is lead by the same professionals that
help create future X PRIZEs
• Two days, staff is broken into randomly
created teams
• Goal is to “innovate from within” using a team
approach
• Outputs include both process improvements
and new strategic initiatives
Staff Visioneering
• Designed to provide the annual „roadmap‟ for
the Foundation
• Build on opportunities identified in staff
visioneering
• We define the desired objectives but not the
solutions, including
– Desired Outcomes to further mission “why are we
here?”
– Vision of organizational health
– Cultural and people objectives
• Strategic focus areas for potential future
X PRIZEs
Executive Visioneering
Operational Planning
and Budgeting
Organizational Attributes:
- Divisional, not franchise
structure
- Utilize shared services
concept
- No single competition
more important than the
Foundation
• Toolkit includes:
– Dashboards
– Project Plans
Operational Planning
and Budgeting
Single most critical
component to success:
Communication
Communication
Interdisciplinary
communication is the key to
a successful operational
plan and budget.
Budget Sponsorship
Marketing
Fundraising
Prize
Operations
Finance
Prize
Development
Public
Relations
Executive
Team
Operational Planning
and Budgeting
Dashboards play an
important part ensuring
everyone is working toward
the same objective.
Program Objectives
Operating Objectives
Culture Objectives
Expenses Revenues Personnel
Current Prizes New Prizes Education
Workplace Teamwork Lifestyle
Operational Planning
and Budgeting
Project plans are more
important than the numbers
in them.
Project Plan
Scope/Quality Resources Budget
Complexity
Deliverables
Metrics
Exec. Team Timeline
Depts.
Time Needed
Schedule
Size
• Capacity Planning
– Total capacity set by Executive team
– Forces operational discipline
– Utilize “Speed Dating” to ensure each department
head plans appropriately
• Budgeting
– Used as a guidepost rather than an operating bible
– Have moved to a rolling forecast methodology to
account for new opportunities as they arise
• Proper Competition Planning
– Audacious vs. Achievable
Operational Planning
and Budgeting
How do we prevent so
many great ideas from
creating chaos?
Competition Planning
Risks:
– Could cause more harm
than the real spills
– Cannot test in the „real‟
ocean
We Made it Achievable:
– Limited solutions to
mechanical means
– Use the only oil spill test
facility in the world!
– Only the ten best
Results
All ten finalists exceeded
both the minimum Gov‟t
standards and the minimum
competition standards
Winning team beat current
standards by 3x
Competition conceived and
won in less than 18 months
Completed under budget