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 cofound 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 2 of my interview of Karl. to read all of it, please click here.
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Morris: When and why did you decide to write The Reciprocity Advantage and do so in collaboration with Bob Johansen?
Ronn: Bob and I have known each other for a long time. His Institute for the Future, IFTF, did forecasts for P&G and I was a user of them. When I moved to Silicon Valley I asked Bob to come work with me as I helped senior management teams find new areas of growth. We were flying back from the Philippines after a successful meeting where Bob had opened their eyes to the future and I had worked to turn that into tangible new business leads. Bob realized that the IFTF model of foresights into insights into action described our partnership.
Bob was strongest at foresight into insight and I was strongest at insight into action. This became our personal reciprocity advantage. Together we were capable of doing what neither of us could do alone. Having written several books, Bob suggested we try to write a book together. The result is The Reciprocity Advantage. Bob and I collaborated on the Part 1, the model. Bob took the lead on Part 2, the future forces. I took the lead on Part 3, creating you own reciprocity advantage.
Morris: Were there any head-snapping revelations while writing it? Please explain.
Ronn: Not really. We already knew that the future would require reciprocity. It is a social media world and control is more of a myth than ever. Writing the book clarified our thinking. Both of us know a lot more about what each other do and can tell the other part of the story better, but Bob’s still the foresight to insight guy and I’m the insight to action guy.
Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?
Ronn: We submitted an overview and an outline for the book that is nearly identical to the final book. This three-part outline with four steps to the model covered in each part drives the twelve chapters. Then there needed to be an introduction and a Chapter 13 to discuss the future. It is what makes it possible to co-author a book. As we describe in good partnerships (Chapter 10), we came together to do one specific agreement. That kept us focused and also made it possible to ignore the hard parts about co-authoring.
What’s more different for me has been the reaction. Since publishing I have been commenting on most of the big business news stories involving acquisitions, divestitures, new alliances and partnerships. The framework we are using for creating new businesses is very useful in analyzing these news items. I’m even more impressed with IBM and Apple with their recent announcements. Both continue to share their right-of-way to create new businesses and have very robust innovation approaches. It is sad to see companies like HP struggle for what are very recognizable — and avoidable — problems. Reciprocity is the future, but the time to act is now.
Morris: You suggest that there are eight essential steps to the design thinking process, beginning with frame the given challenge (i.e. the killer issue to be resolved) and concluding with sharing the prototypes with senior management to obtain a commitment of resources. Which step seems to be the most difficult to complete?
Ronn: Tim Brown (IDEO) has told me that I ask good questions. Framing the challenge is the most critical part. The general way to frame the challenge should be of this form: Reinvent X, while being sure to leverage Y. Reinvention opens the door to radical change. Leveraging Y is the accommodation of a constraint that must be met. Most projects don’t probe reinvention or, when they do, they apply no constraint. Without the constraint the team will not be grounded to the key needs of the company. Every other step is about a robust prototyping process.
Morris: Here’s a follow-up question. At which point during the process does it usually become obvious that the given initiative should be either stopped or redirected?
Ronn: Let the team define the milestone they will meet in the next 30-90 days. Then after the time is up check the result versus the team’s self-imposed milestone. If they hit it, set a new milestone. If they miss it, give them 30 days to hit another self-imposed milestone. If they miss it again, there is a problem. It is less likely that they are wrong than that they have mis-estimated the difficulty or the problem. For the third try make them get someone else to help determine the next experiment to be run. This prevents group think. If they now see it is so hard and lose passion, stop it. If the third experiment fails, stop the project — at least for now — or find new partners (Chapters 10-11).
Morris: What unique leadership challenges does this approach pose? How best to avoid or overcome them?
Ronn: Day-to-day business is about production. This is about learning. Learn about the two biggest killer issues, the next two killer issues, and so on. If you find a killer issue that you can’t manage, you must stop the effort. In the end the team should produce successful new businesses, but but be sure to reward learning along the way.
Morris: What are the defining characteristics of a workplace culture within which the reciprocity is most likely to be achieved and then sustained?
Ronn: The challenge for reciprocity is deciding to share your company’s right-of-way to create new growth. It requires a senior management mindset. If you can achieve all your growth for the next 5 years without new sources of growth, you may not need to practice reciprocity … yet. If your core business is on fire, you will be a terrible partner. Put out the fire and then partner. It is not a workplace culture problem; it is a strategic priority. Sadly, most companies react too late. Hilton or any other chain could have done AirBnB and now couldn’t afford to buy them. eBay is selling off PayPal just as Apple is entering with Apple Pay.
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To read all of Part 2, please click here.
To check out 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.