Karl Ronn is the managing director of Innovation Portfolio Partners. Based in Palo Alto, he helps Fortune 500 companies create new businesses or helps entrepreneurs start category creating new companies. He is a co-founder of VC-backed Butterfly Health that sells Butterfly body liners nationally. He is also developing a software company building diagnostic competency for physicians using virtual human simulations of top medical school cases.
Previously, he was vice president of Research and Development and general manager of New Business for Procter & Gamble, where he was one of the key innovators behind Febreze, Swiffer, and Mr. Clean Magic Eraser. In addition to these brands he was responsible for the Global R&D for Pharmaceuticals and Over-the-Counter Health Care including Actonel, Vicks, Prilosec, and In-home Diagnostic Tests. He has also managed Beauty Care businesses and started Diaper and Maxipad businesses across Latin America.
He is on the advisory boards of Johns Hopkins Bloomberg School of Public Health and the University of Toledo. He is a member of TED conference and has been a speaker at the Mayo Clinic, Consumer Medical Conference, AMA and other innovation forums. He is the co-author with Bob Johansen of The Reciprocity Advantage: A New Way to Partner for Innovation and Growth, published by Berrett-Koehler Publishers.
Here is an excerpt from Part 1 of my interview of Karl. To read the complete interview, please click here.
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Morris: Before discussing The Reciprocity Advantage, a few general questions. First, who has had the greatest influence on your personal growth? How so?
Ronn: I have about 10 people who are my personal sounding board to help me. They are family, friends, business leaders, and academics. I use them to make sure I’m growing, to respond to ideas, and to challenge me. This helps me decide where to spend my time.
Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.
Ronn: I’ve had multiple turning points. While in college I was an intern on the executive floor and learned that senior management needed proposals to strengthen their ideas; they didn’t have all the answers. Then when studying finance part-time I realized that R&D risk could be managed by applying the tools used in finance leading me to develop the risk classifications discussed in Chapter 9. Lastly, by asking people who had known me for many years I was able to determine that my most valuable role was as an Angel, the person who plays a nurturing role between inventors and senior management, to nurture different in kind ideas through the “valley of death.” This role was part of what I did at P&G and is what I now do full time.
Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?
Ronn: My engineering degree taught me to be a problem solver and how to learn new fields of science rapidly. Later I studied finance to learn how companies really made decisions so I could build better rationales for funding new developments. While I was studying capital asset pricing models and modern portfolio theory I realized that nobody had created the equivalent of stocks and bonds for the different types of R&D investments. One would never compare a stock to a bond. Instead we balance a portfolio. Yet companies pick favorite projects and compare incremental projects to new business developments. To achieve consistent growth I needed to determine what an R&D portfolio’s structure needed to be. Chapter 9 of this book reflects the solution to that problem. The 3×3 matrix shows the distinct types of R&D investments and discusses how to balance them to achieve consistent topline growth.
Morris: What do you know now about the business world that you wish you knew when you went to work full-time for the first time? Why?
Ronn: I was fortunate that my engineering internship happened to be on the executive floor of a power company, Toledo Edison. First hand experience taught me that Senior Management wanted me to help them create better answers. The worst case would be they would just say no, the best case was they would change their plans. I was also there when Three Mile Island happened (to another company). We had a sister plant of the same design. So, I was inside of a major breaking story and I could see “the fog of war” requiring agile decision making with incomplete information. So, when I started work at Procter & Gamble after college this gave me the courage to propose new approaches and shape projects even as a new hire.
Morris: From which books have you learned the most valuable lessons about business? Please explain.
Ronn: I’ve been lucky to meet and work with many of the key thinkers on innovation. Their books are good, but the discussions have been more critical. Clayton Christensen, Dick Foster, Scott Anthony, Tim Brown, David and Tom Kelley, Roger Martin, Mark Fuller, Douglas Englebart, John Kotter, Ted Levitt, Nicholas Negroponte, Neil Gershenfeld, Rosalind Picard, Rita McGrath. If you choose to read their books, read their first book which will show their initial insights and their latest to see how that has changed.
Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-tse’s Tao Te Ching:
“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”
Ronn: Be a servant leader. Empathy is the key skill. Listen for a problem and then help the person with the problem create a solution. We have a mythology of single people who made a difference. Each of us has a role to play. Be a key member of the team and lead when it is your time to lead and follow the rest of the time.
Morris: From Howard Aiken: “Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.”
Ronn: I’m not this cynical. You don’t need to worry about people stealing ideas that are big because they are too hard to solve alone. In Silicon Valley new ideas are discussed in coffee shops without any privacy. If the people at the next table can solve the problem, you should partner with them. The problem is that most ideas are small. Those require protection because being first is their only advantage, and a short-term one.
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To read all of Part 1, please click here.
Karl cordially invites you to check out the resources at these websites:
For more information about future forecasts, please click here.