INNOVATING IN AN AGE OF EXPONENTIAL CHANGE

MOVING FROM COMPETITIVE ADVANTAGE TO DISRUPTIVE ADVANTAGE

Terry Stuart Partner, Chief Innovation Officer Deloitte Canada February 8th, 2017

Canadian businesses

show higher risk

aversion than the US

Canada has fewer

high growth mature

firms than the US

1 in 3 Canadian

businesses invest below

average for their industry

without knowing

Past research already suggests Canada is vulnerable to disruption

Highly prepared

13%

Single-minded

23%

Unprepared

35%

Tentative

29%

87% of Canadian firms are not fully prepared for disruption from advanced technologies

What do we mean by disruption?

“A process by which a product or service takes root

initially in simple applications at the bottom of a market

and then relentlessly moves up market, eventually

displacing established competitors.”

Clayton Christensen, Author - Innovator’s Dilemma.

Terry Stuart @ C2 Montreal 7

Spotify 6 years to a billion

UBER +2 years

Oculus just over a year

Slack just over a year

Shopify 9 years to a billion

AirBnB 4 years

The speed to $1 billion

The increasingly crowded unicorn club

Time

Op

po

rtu

nit

ies –

New

In

no

vati

on

s

Emergence of new models for customer & channel value

Living in an exponential world

30 linear steps

About 30 yards… … 26 times around the earth

The disruptive nature of exponential growth

30 exponential steps (i.e. 1 + 2 + 4 + 8 + 16 + 32 …)

Advanced Robotics

Artificial Intelligence

Networks and sensors

Advanced Manufacturing

Collaborative Platforms

Change enablers

Virtual / Augmented Reality

Blockchain

Artificial intelligence is displacing

Human workers in professional practices

Watson is an artificially intelligent software built to mirror the same learning process that we use to

inform decisions

14 Go to "Insert" tab in Ribbon to insert Header & Footer

Meet Amelia:

The virtual agent avatar

that can redefine the

future of IT

Networks and sensors enable

companies to deliver a level of customization never before possible

Blue Rover uses the Internet of

Things to provide businesses

with real time analytics

The Industrial Internet

brings together brilliant

machines, advanced

analytics and people to

eliminate any unplanned

downtime

Cheap and advanced sensors

Smart meters

Real time information

BIG data

Machine Learning

Dynamic customer segmentation

Personalized messaging

Better customer experience

Behavioral nudges

Accurate Supply-Demand Forecast

Putting it all together

Advances in robotics are changing how we manufacture goods and

replacing human labour

Robots are coming

HERE and are smaller, safer and can work among us

Meet Navii:

A fully autonomous

Inventory and Customer

Service solution

Advanced/additive manufacturing techniques are changing how products are

made, tested and developed

3D Printing & Construction

There are various technologies that use 3D printing to construct buildings. The process

exponentially speeds up construction, lowers labour costs, and produces less waste.

Real Estate Disruption

Densification: No need to hold inventory, on demand printing

Location Independence: A fundamental disruption of the current supply chain

Affordability: New technology enable more cost effective ways of construction

Potential to impact:

Insurance

Infrastructure

Parking

Real estate

Auto manufacturing

Autonomous Cars

No longer science fiction…formal target dates:

2020 2018 2030 2020 2024

2020 ? 2018 2025

2025

2020 2020

Short term? Longer term?

The impact of electric cars has a material impact on parking

Storage is still a challenge

Public sector: The Civic Innovation Lab

"It is really looking at how as a city we can leverage some of the incubators that we have here, and work with them to find solutions

to municipal problems."

Barry Vrbanovic

We believe effective innovators replace myths with methods

What does this mean for you?

Observable events

Patterns

Trends

System Dynamics

Be explicit

about innovation ambition

1. Look beyond product innovation

2. Drive innovation from deep and unconventional insights

3. Focus on discipline

4.

We believe effective innovators follow 4 important principles

Innovation Ambition matrix

MARKETS &

CU

STO

MERS

70%

20%

10%

PRODUCTS & ASSETS

TRANSFORMATIONAL

ADJACENT

CORE

Building for sustainable breakthroughs

Easier to Implement Bolder Concepts Harder to Copy

Look beyond product innovation

Think Tanks

Influencers

Federal

Provincial

Municipal

Programs

Experts

Clients

Start-Ups

Partners

Vendors / Suppliers

Speak

Host

Sponsor

Attend

Innovative

Companies

Government

Community

Member Firms

Competitors Investment Community

Incubators / Accelerators

Education institutions

Thought

Leaders

Organized Networks Conferences

Media

Engaging an innovation ecosystem

Staying current on new disruptive technologies requires active Ecosystem Management

• How prepared is my organization for this new age of disruption?

• How does my organization build a sustained Innovation Engine?

• Which specific exponential technologies are most likely to disrupt my industry?

• How do I build a continuous sensing organization?

• What Ecosystems does my organization need to build linkages to?

The impact of innovation is a function of the level of courage that we have (and our ability to execute).

By now you should be asking yourself

“All too often we...

...look for someone else to make the difficult choice or pursue the challenging route” ...shy away from making key investments and executing dynamic strategies” ...unwilling to accept short-term challenge for long-term opportunity” ...lack the necessary courage to make bold decisions in the face of uncertainty and risk”

© Deloitte LLP and affiliated entities. 46

Measuring the impact of courage

We designed and deployed a survey that evaluated 1,200 Canadian businesses on the five elements of courage.

A framework was developed to segment the survey respondents by courageousness.

The impact of courage on business outcomes was evaluated using survey questions aimed at measuring respondents’ businesses performance.

We surveyed 1,200 Canadian business leaders and evaluated the level of courage in their organizations.

47 © Deloitte LLP and affiliated entities.

Canadian companies that

can be considered truly

courageous

11%

Canadian companies that are

evolving—they are on the cusp

of courageous

30%

Only one in ten

Canadian businesses is

truly courageous.

Building courage in

evolving firms is critical to

the country’s future

prosperity.

48 © Deloitte LLP and affiliated entities.

Canada

consistently

underinvests

in growth.

We have a

deep-rooted

aversion to

risk.

Projections

of future

growth

are grim.

49 © Deloitte LLP and affiliated entities.

One third of Canadian firms are evolving—these firms are on the cusp and can become courageous if their leaders take action now

0%

10%

20%

30%

40%

50%

11%

30%

43%

15%

Fearful Hesitant Evolving Courageous

50 © Deloitte LLP and affiliated entities.

To secure a brighter future for our country, business leaders must make a commitment to cultivating courage in their organizations.

The Constructive Disruptor Experience Roadmap

Schedule a test drive

Get your headset and explore

(Oculus, Vive, Daydream)

Ask Watson a question on TED

Try a personal drone

Watch Westworld

Buy an ecobee3 Thermostat

Buy a Philips Hue

Exponential Organizations by

Salim Ismail

Canada's Age of Disruption Report

Visit: exponentials.xyz

Read

Doblin's Ten Types of Innovation book

BOLD by Peter Diamandis

World Economic Forum: The Future of Financial Services

Watch

Engagement Opportunity

INNOVATION STRATEGY

CAPABILITY BUILDING

DISRUPTION LABS

SENSING PLATFORM

AGILE DELIVERY LABS

INNOVATION JOURNEY

For the first time in Canada, the top speakers from

SingularityU will join Canadian leaders and innovators for

an unforgettable experience.

Singularity University empowers a global

community with the mindset, skillset and network

to create an abundant future.

OCTOBER 10-12, 2017 // TORONTO

SAVE THE DATE

Limited seating available.

Go to SUCanada,org to save your spot

ca.linkedin.com/in/terrysstuart

TERRY STUART Learn more at:

www.exponentials.xyz

http://AgeOfDisruption.xyz Presentation code: EDCO-FEB8

Thank you!

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