Innovation at Liberty Global

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Innovation at Liberty Global

Student Name Amar Kalvikatte

Student Number 10898727

Professor Dr. Jeroen Kraaijenbrink

Liberty Global Supervisor Daniel Danon – Director Product Strategy

Subject Innovation@ Liberty Global – MBA Final Thesis/Company Project

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Document version and Approval

1.1 Version history

Version Date Author Description

1.0 06-Oct-2016 Amar Kalvikatte Innovation at Liberty

Global

2.0 11-Oct-2016 Amar Kalvikatte Innovation at Liberty

Global

3.0 14-Oct-2016 Amar Kalvikatte Innovation at Liberty

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1.2 Approval

Name Job description Date Approval Signature

Dr. Jeroen Kraaijenbrink Professor, University of Amsterdam Business School Dr. Sebastian Kortmann Associate Professor of Strategy and Innovation

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1 Abstract

Abstract Title :Innovation at Liberty Global

Program : Master program in Business Administration (MBA)

Course : Innovation Management

Supervisor : Dr. Jeroen Kraaijenbrink

Thesis purpose:

The key objectives of this thesis is to address how Innovation happens within Liberty Global as well as in the Cable Company/Telecommunication industry outside. New technologies and dynamic effects of convergence are changing the way end consumers access to triple-play (Video, Voice and Internet ) with the help of smart phones, Apps.This basically adds

considerable uncertainty to business planning, more precisely concerning future demand, and implies the need to ensure a cautious, and technology approach in the new way of design of regulation as well as application of competition law which becomes more complex as rapid technological changes and increasing demand for the triple-play services.

New business models based on open Innovation & open Business Models are going to help Telcos to survive and thrive through transformation. These includes value added services pertaining to triple play, mobile, online and media on both consumer and enterprise side. One of the impacts technological developments and convergence have on the Cable company is the increased attractiveness of Joint Ventures and Mergers both at national as well as global level and Liberty Global is doing exactly the same via multiple M&A to create synergies.

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2 Table of contents

4 LIBERTY GLOBAL as a company ... 7

5 Leadership Team– Liberty Global ... 9

6 Management summary ... 10

6.1 Speed of execution ... 10

6.2 Fast access to business resources ... 10

6.3 Team environment ... 11

6.4 Company-wide innovation support ... 11

6.5 Measure innovation ... 11

7 What is innovation? ... 12

7.1 Dictionary ... 12

7.2 Triggers of innovation ... 13

7.3 Types of Innovation. ... 14

7.4 My advice for Liberty Global ... 15

8 What if our competitors are Apple, Facebook, Google, Amazon? ... 16

8.1 Companies ... 16

9 Competitive landscape ... 18

9.1 Liberty Global Competitors... 18

9.2 SWOT Analysis ... 19

10 Why innovation ... 20

10.1 Attention Span ... 20

10.2 How do the best companies grow? ... 20

10.3 Innovation requires structure ... 21

10.3.1 Structured innovation requires ...21

10.3.2 Structured innovation as process ...22

11 How to measure success of innovation? ... 23

11.1 Value- creation ... 23

11.2 Liberty Globals goal ... 24

11.3 Measurements of success within Liberty global ... 24

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12 Liberty Global Management view on innovation? ... 26

13 How is innovation organized in Liberty Global? ... 28

13.1 Examples of Liberty Global search for innovations ... 29

14 Liberty Global Culture on innovation ... 32

14.1 Zoom ... 32

15 Strategy to use innovation in the future? ... 33

15.1 Customer Centricity ... 33

16 Conclusion ... 37

16.1 Management ... 37

16.2 Culture ... 37

16.3 Make customer experienceplan ... 37

16.4 Measure customer experience. ... 37

16.5 Action plan ... 38

17 Innovation of 2020: Power from the Air ... 39

18 Articles/References ... 40

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3 Acknowledgements

First of all, I would like to express my sincere gratitude to the University of Amsterdam Business School for their high level of educational excellence, exposure that they offer to each student that passes through their doors, and for introducing me to so many amazing mentors. This gratitude of course extends to Dr. Jeroen Kraaijenbrink, who is my thesis supervisor and has helped me understand this multifaceted topic and supporting me. Thank you. Without his guidance and continuous help, this thesis would not have been possible. Lastly, I am grateful to Dr. Sebastian Kortmann for always going above the call of academic duty to support the students that he interacts with, please know that this means more than you may ever know. So thank you Dr. Sebastian Kortmann and you are doing great job there. Finally many thanks to Administration Team – Saskya,Vanessa,Lesley,Gosia. Keep up the good work. Lots of success to Amsterdam Business school.

I would also like to express my appreciation to Daniel Danon of Liberty Global for his responsiveness to my thesis and allowing me to access company resources. I would like to thank to different department people I met within Liberty for their cooperation during the interview process.

I would also like to acknowledge the support to my MBA colleagues from University of Amsterdam and my best friend Vijay Sewkaransing, for their support, encouragement during the MBA program and also guiding me on thesis. Without them, I would not be able to defeat the difficulties I encounter.

Finally, I would like to thank my Wife, Alpa Kalvikatte and my son Atharv for the sacrifices they made over the past two years. They kept me literally alive and focused on what really matters.

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4 LIBERTY GLOBAL as a company

Liberty Global Inc is an international cable company that provides cable television and internet services. It connects people to the digital world and enables them to discover and experience its endless possibilities. The company's television, broadband internet, and

telephony services are provided through next-generation networks and innovative technology platforms that connect customers who subscribe to services. Its consumer brands include Virgin Media, Ziggo, UPC, Unity media, Telenet, Ziggo and VTR.

Liberty Global invest in the infrastructure that empowers their customers to make the most of the digital revolution. Their scale and commitment to innovation enable us to develop market-leading products delivered through next-generation networks that connect their customers who subscribe to over 59 million television, broadband internet and telephony services. Liberty Global also serve over ten million mobile subscribers and offer Wi-Fi service across six million access points.

Revenue: $18.4 billion Employees: 37,000 54 million homes passed 27 million customers

57 million RGUs (video, internet, and voice subscribers) 7 million mobile subscribers and 6 million Wi-Fi access points

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5 Leadership Team– Liberty Global

respect. Corporate governance affects the way we direct our company and the relationship we have with our stakeholders. We believe that the highest standards of corporate governance are essential to our business integrity and performance. We have adopted a number of policies and procedures to support solid corporate governance in every area of our operations.

Dr. John C. Malone , Chairman of the board

• Over 40 years of cable television and media experience

• Plays a key role in establishing the company’s strategic and financial priorities

• Industry pioneer, visionary and humanitarian, who has received numerous accolades for his work

• Board member and/or chairman of several media and communications businesses

Michael T. Fries, CEO and President

• A 30-year veteran of the cable and media industry

• Under his leadership, Liberty Global has grown into the world’s largest international cable company, an expansion he was instrumental in building over the last two decades

• Board member of a number of professional and philanthropic organizations

Balan Nair, Chief technology officer and EVP

• In this capacity he is responsible for overseeing Liberty Global’s worldwide network, Technology and Innovation operations, including Product Development, IT, Network Operations, Mobile Operations and Global Supply Chain functions

• He also leads our Technology Investment Venture group and our Corporate Strategy Group.

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6 Management summary

Liberty Global sees Innovation as a source of growth and a way to sustain competitive advantage. These days developing innovative ideas is a very critical activity for growing companies of all sizes Small, medium and Large . What is currently happening at Silicon valley is that small businesses booming up. SME sector is only just at the beginning of the digital transformation that provides completely new demands on the management. Small businesses are nimble and bold and often teach much larger companies a thing or two about innovations that can change entire industries.

But still leaders of many small companies believe innovation is just for big companies that employ research scientists and have large research and development departments. This false belief prevents many leaders from effectively identifying and applying innovations in their organizations. As a result, small businesses may fail to identify valuable ideas that would assist them in growing a profitable company.

Most leaders of small companies can leverage their business size and unique culture to rapidly develop and apply creative ideas.

Here are five different ways most of the small companies can innovate better than much larger organizations and this is very true, specially happening at Silicon valley in Unites states.

6.1 Speed of execution

Most the experience Engineers, research scientists and technologists are coming out of the big corporates and starting small businesses, especially in silicon valley. Lots of venture

capitalists are making investments with these kind of people who has brilliant ideas and also considering their track records in the current organisation and how they turned around revenues for the firms. These believes give confidence to investors that the Small businesses can position themselves to make decisions quickly, allowing them to be first to market with innovative ideas. Instead of spending months or years evaluating new ideas and passing them through multiple departments, a flexible small business can make fast decisions regarding whether to pursue a particular idea. When a valuable idea is discovered, it can be developed quickly and launched to potential customers. This fast action distinguishes the business as an innovator, and causes its competitors to play catch up.

6.2 Fast access to business resources

After all valuable ideas are discovered, then the business leaders quickly allocate resources to develop and market the idea. Multiple departments can get involved at the same time to implement the new idea, and personnel reassigned to the project, which shortens the

development time. Larger companies with many product lines must distribute their resources among all of their products and services. A smaller company is able to temporarily reallocate significant resources to the innovative idea that is critical to the growth of the company.

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6.3 Team environment

Small businesses basically develop a team culture that encourages everyone to get involved in the innovation process. Rather than focusing creative activities on a few individuals or groups, business leaders promote creative thinking throughout the organization. Every individual brings different experiences and perspectives that can assist in the identification and

development of new ideas. This team approach accelerates the speed of execution, which helps position the business as a market leader.

6.4 Company-wide innovation support

To successfully cultivate a team of people who are actively identifying and developing

innovative ideas, a company’s leaders must openly support innovation activities. This support must start from top management with CEO and include all other executives, directors and managers. When employees and contractors see unanimous support for creative activities, they understand the importance of those activities and are motivated to participate. This helps to strengthen the team environment and accelerates the development of new ideas.

6.5 Measure innovation

Just to continue motivate people to spend time identifying creative ideas, small businesses can emphasize innovation by making it part of the company’s job descriptions and evaluation criteria. Many companies do not consider innovation when evaluating an employee’s performance. If bonuses and pay increases are not tied to any creative activities, it sends a message that new ideas are not important. This message causes employees to place a greater emphasis on other activities that are specifically mentioned as part of their job performance. Start measuring and emphasizing innovation to stress the importance of creative thinking to everyone in the organization. Regardless of the size of the company, business leaders who start identifying and applying innovative ideas will enjoy a thriving business.

My advice for Liberty Global

Our customers' happiness and overall satisfaction must be depends on the quality of their product experience. Liberty global must collaborate with leaders and teams across Liberty Global create exceptional experiences that leave lasting impressions, improve daily lives, and foster long-term customer relationships and above five ways will help Liberty Global to innovate better.

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7 What is innovation?

“Innovation is the application of better solutions that meet new requirements of market needs. This is accomplished through more effective products, Processes, Services,

technologies or ideas” (Source: Innovation management course at Amsterdam Business

school)

7.1 Dictionary

“Innovation is the process of change that creates and grows Liberty global wealth (Roger

More, 2010)”

It is important to distinguish between invention and innovation, Clearly, the word innovation represents a complex construct, a concept of wide and divergent dimensionality and

conceptualization. Virtually every literature, writer, and manager has a different view of how to conceptualize what it means, and what dimensions and processes define it. In itself, this is a major methodological challenge.

Definition of Innovation :

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.

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7.2 Triggers of innovation

Although this thesis is about Innovation and I would like to mention that there can be a number of reasons why a project and/or service development can start.

Market transparency, labor mobility, global capital flows, and instantaneous communications have blown that comfortable scenario to smithereens. In most industries — and in almost all companies, from giants on down — heightened global competition has concentrated

management’s collective mind on something that, in the past, it happily avoided: change. Successful companies, as Harvard Business School professor Rosabeth Moss Kanter told s+b in 1999, develop “a culture that just keeps moving all the time.”

Reasons for innovation:

1. Business changes (e.g. changing market, regulations, organization) 2. Technology (upgrade hard- and/or software/products/services) 3. Customer demand/need

4. Innovation (technology, methodology)

5. Competition (strive to be best of the class, market leadership)

Business changes

All companies have to deal with the continuing changes of the market and regulations and the impact on the organisation. This is a continues program within Liberty Global. This is a complex program because Liberty Global is an international company that has its activities in many countries.

All these changes have their direct impact to the internal organisation.

Technology

Like all companies in this market, Liberty Global is depending on computer technology, this technology is under continues changing e.g. equipment needs replacement, new technology replacing existing technology, software needs updates.

Currently Liberty Global is reposition their Data Centres and equips them with the State of the Art Technology.

Customer demand/need

Customer research is a part of market research for Liberty Global in which preferences, motivations, and buying behaviour of the targeted customers are identified through Face to face interviews ,over telephones, mail surveys, published resources and marketing initiatives. After collection and evaluation of all this data, it is decided what ideas/suggestions will be used for further investigation and will eventual lead to the development of a new product and/or service.

During this initial process these ideas are mapped against the business strategy and internal goals and objectives.

Converting an idea into a reality, regardless of the required investment of time and money, is never an easy task. In fact, it is extremely difficult. Perhaps it’s because the process of

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Innovation (Technology, methodology)

New technology/methodology will lead to new projects and/or service development.

The world is constantly changing and with this, new technology is developed and companies needs to adapt to this technology to stay on top of the market.

Depending on the strategy, one choose to be a leader or a follower, a leader will have to deal with all the high development cost. A follower will wait until the technology is proven and will adapt it.

Competition (strive to be best of the class, market leadership)

To become a market leader you must be aware of what your competitors are doing, one of the ways to become a market leader in your field is to learn from the mistakes others make. Sometime competitors will fail implementing a good idea because the timing was not right or the idea was not innovative enough or there was no need for the product.

7.3 Types of Innovation.

A number of frameworks have been used to look at types of innovation. Generally these approaches for categorizing innovation consider the sources of innovation from past successes or attempt to identify where to look for new innovation in the future. The variety of innovation types demonstrates that the benefits of innovation are not limited to new product development. Categorization also helps in the measurement of innovation, allowing for performance

comparison and evidence based choices that can guide where improvements or advances might generate the most return for a given investment. Within Liberty global

• Strategic Innovation – Strategic innovation is the creation of growth strategies, new product categories, services or business models that change the game and generate

significant new value.

• Incremental Innovation - This basically make small changes to a company’s existing technologies and their business model.

• Breakthrough Innovation - This basically make significant changes either the technology or company’s business model that helps producing significant growth. • Radical Innovation - This basically take place more rarely and it combines

technology along with business model innovation to create new big firms with rapid growth.

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Does Liberty Global want to be an Innovator or Improver, emphasis on radical innovations or on Incremental Innovations?

7.4

Liberty global always want to be an Innovator and focuses on “ Strategic Innovation”. This focuses on FuturePresent. Liberty Global must invest in their leaders to ensure they develop their own innovative thinking capabilities and have the capability to develop their employees and teams innovative-thinking skills. They also need to design their culture and organizational practices to make innovation possible. As well, They require a well-developed, organization-wide innovation plan to ensure a focused approach to organizational innovation. An

organization-wide innovation plan enables local teams to focus their innovative thinking activities and align their innovations with the organization’s overall requirements for innovation.

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8 What if our competitors are Apple,

Facebook, Google, Amazon?

Whether you want to admit it or not, they're out there and they're hungry for your customers. While it might seem unfair given everything else you need to keep on top of in building up your business, you might want to consider devoting the time and energy into keeping tabs on your competition. By monitoring competitors on an on-going basis you get to know their behavior and so can start to anticipate what they will be likely to do next.

8.1 Companies

Apple, Facebook, Google , Amazon (leading an Internet-based consumer revolution) pretty much set the agenda for the entire consumer electronics industry and they replaced the

previous four technology giants Microsoft, Dell, Cisco and Intel. They employ a great number of the smartest and most creative technologists in the world and produce the most influential innovations. Whether it’s Windows, the iPhone, or Google’s titular search, these four

American giants’ contributions have shaped our social and economic and person's social environment as much as our technological one. Their futures promise to be as different as their pasts, however the present products and services on offer from each company show them to be closer than ever. They all seem to be solving the same problems.

The member organizations also include: 1. Suppliers

2. Lead producers

3. Competitors, and other stakeholders

Over time, they co-evolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding

leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments and to find mutually supportive roles.

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Cisco has a bit of different story. Cisco is become a platform leader because it provides a major part of the infrastructure hardware and also software behind the Internet. Cisco was to Internet-based networking as Intel was to Microprocessors and Microsoft was to PC Software. Cisco has the four key elements of its strategy were:

• Till today, still Providing complete solutions for customers, thereby becoming a one-stop shop for networking

• Acquiring the products for making complete solutions and to make acquisitions a structured process to bring down the high rates of failures of acquisitions

• Defining and deriving industry standards for networking protocols, and • Forming alliances and partnerships with complementary and competitors.

By doing the above, Cisco became a classic example of managing acquisitions effectively and in the process became the platform leader in Internet networking services present today.

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9 Competitive landscape

Liberty Global provides cable-based TV, phone, Internet access and also offers satellite TV service to about 27 million customers, both residential and commercial, mostly in Europe but also growing in Latin America. In 2016, the European broadcasting & cable TV market is forecast to have a value of $138.2 billion, an increase of 19.1% since 2011.

Below is a list of major competitors for Liberty Global according to country and industry,

Region Liberty Global Companies Competitions

Western Europe Virgin Media, UPC ,Ziggo BT,Vodafone,Telefonica,KPN

Germany Unity media Deutsche Telecom, Vodafone

Switzerland Cablecom Swisscom

Belgium Telenet Belgacom,Vodafone.Orange

Americas Puerto Rico through Liberty

Cablevision

Choice Cable,Claro

Chile VTR Global Com (60% stake) Cable Central,Pacifico Cable SA

Caribbean and Panama Cable & Wireless Caribbean Broadcasting

Corporation, Cable Bahamas, BVI cable TV

Liberty Global and Virgin Media both compete in several industries. Liberty and Virgin both compete in the cable & TV, broadband internet and telecommunication industries. Each of the industries have both different characteristics and growth projections. The market is expected to experience accelerating growth to the end of the forecast period in 2016.

Liberty Global competition companies mentioned in above table competing us in one way or another – Products or Prices.

o KPN has more fibre home network passed than Ziggo-UPC combined and leading

provider for Fiber optic cable in the Netherlands.

o Vodafone is competing with us in most of the regions mentioned above in Mobile networks- rolling out 5G in more quicker and efficient /dominating way.

o BT Group PLC –The company is a communication services provider that is engaged in providing and managing data and voice networks and providing a range of services over these networks. Plus it operates in approximately 170 countries worldwide. It is considered the largest communication services provider to the residential and business markets in the UK. Some of its strengths are: diverse customer portfolio; wide products and services range; robust R&D.

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The competitive landscape in the second half of 2016 intensified with the emergence of an aggressive, low-priced competitor. Liberty Global expect that the Chilean mobile market will remain highly competitive in 2017 and the same from Cable industry perspective.

Digitalisation,

9.2 SWOT Analysis

Strengths

1. One of the largest broadband providers –strong diversified business portfolio geographically and experiencing strong business line

2. Very strong position – Products and services 3. Revenue performance has been admirable

4. Employees: 40,000 People are a part of the workforce 5. Active in 14 countries with a strong presence in Europe 6. well established corporate identity

7. Efficient logistics in all aspect

8. One of the first cable operators to introduce digital telephony and services

9. Solid stock price performance, Healthy Balance sheet

Weaknesses

1. High Capital expenditures involved, very hard to reduce 2. Disappointing return on equity and weak operating cash flow

and generally higher debt management risks a concern

3. Difficult to keep track of changing technology e.g. what is new today is old tomorrow (quick change program)

Opportunities

1. Mobile Digital communications (5G)

2. Demand from emerging market is helping growth

3. Buy Other Cable companies to expand and diversify its portfolio

4. Increase ownership in Telenet (Belgium Cable operator) 5. Seize accretive M&A opportunities in USA

Threats

1. Greater/different services by other Cable and Wireless companies

2. 5G mobile deployment has been rapidly accelerating 3. Government regulations play a critical role

Competition Competitors

Europe – British Sky/BT, KPN,Vodafone, Deutsche Telecom USA - Comcast Corporation,AT&T,Verizon

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Why innovation

Customer satisfaction is seen as a key differentiator and increasing has become key element

of Liberty Global business strategy towards innovation.

10.1 Attention Span

Liberty global live in the era when the technologies are intimately waved into virtually all aspects of our daily lives. Becoming almost invisible, they help us achieve much more things but there are also many shortcomings and unforeseen consequences. On the good side, Liberty global can have bodily sensors tracking our physical activity, physiological

parameters, sleep patterns which can help in detecting patterns or problems. On the other side, for example, our attention span is getting shorter and shorter as Liberty global are being constantly interrupted by notifications, emails, and instant messages delivered to our cell phones or watches, and similar disturbances. Moreover, the privacy issues involved in storing and manipulation of these data must not be neglected.

The technological convergence of sciences that were considered as separated in the past, like information and communication technologies, cognitive sciences, nanotechnologies and biotechnologies, will actually determine not only our society, health and economy, but also our education and culture.

Innovativeness and Creativity (coming up with new idea) are the two important parameters that helps to change or alter by introducing something new; to remodel, ability to look at situations from multiple perspectives.

In the age of digital transformation, Liberty Global and even other organisations are faced with the need to innovate more and quickly that drives business growth and also helps to stay ahead of the competitors, plus it helps in generating new business models and creates new products, new processes/ services, and technologies designed for changing market which helps to boost customer satisfaction and employee engagement all together.

10.2 How do the best companies grow?

They innovate, then build market share and memory structures to reinforce it.

Innovation is one of the most important precursors to building a long term growth engine for your business. The companies with the strongest brands, most motivated employees, and healthiest investor bases are typically those where their top stakeholders are invested for the long term. They have customers, employees, and investors committed to the future growth of the organization. Growth doesn’t come from cutting costs or making systems more efficient — it comes from expanding product and service offerings into new markets. But to be truly innovative, your innovation requires two things: structure and measurement.

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10.3 Innovation requires structure

There is a discipline to innovation, or as Peter Drucker writes in the Harvard Business Review, “innovation is real work, and it can and should be managed like any other corporate function. But that doesn’t mean it’s the same as other business activities. Indeed, innovation is the work of knowing rather than doing.”

As a corporate function, it has to have a structure. Structure can either be a strategic investment in an innovative culture that pulls good ideas from all areas, levels, and geographies, or it’s the process used to go after innovative ideas.

10.3.1 Structured innovation requires

An innovation structure can be in the strategic culture created to encourage and inspire innovation. While some companies pull innovation out and create specialized centers of innovation, there is a growing argument for a dispersed innovative culture. Innovation, now more than ever, is expected to come from all levels and areas of the company. It’s not just strategy teams at the top level, but even front line workers have a unique perspective that companies can use. One of the greatest reasons for building an innovation culture is to increase participation, thus increasing testing and feedback for improvement of ideas. It should enable and reward thoughtful risk-taking. Every company has to have their own system for creating an innovation culture. For Percolate Liberty global use our

company values as a rubric for decision making. These values, along with our biannual Hack Days and clubs, help foster a culture of ownership, improvement, and ultimately new thinking. Our founders were strategic about how they created these values.

The culture of innovation can be created through a number of steps:

1. Make it clear to everyone the intent of innovation: This is an attitude that starts at the top. The whole organization should feel the sincerity and importance of innovation. More than that, the intention of innovation is to advance the business. It should align with the company’s greater business goals.

2. Structure what seems unstructured: Free thinking isn’t free, so offer the paid time for side projects, offer rewards in the form of bonuses, training, or promotions for good work on innovation, and rework performance measures to include participation in innovation projects.

3. Offer support, but also know to step back and let happen: Make sure that you offer innovation training and tools first, but then give your employees the time and space for magic to happen.

4. Measure what is most important and make sure people know: Performance measurement itself can act as incentive for your employees to take on side projects. Early in a project, the ideas for the outcomes should help guide setting metrics.

5. Create the space for it: it may seem cheesy, but swag, posters, and company lore encourage innovative thinking.

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10.3.2 Structured innovation as process

An innovation structure is also a process that goes from thinking to building to selling, with built in feedback loops. Whether innovation is just part of the company culture where

employees are thinking about it in their day-to-day or it is housed in an innovation lab that sits apart from the rest of the company, there are steps in innovation. Every innovation lab outlines their own process, but they all have essentially the same ingredients: strategic thinking,

brainstorming, prototyping and testing, feedback, and then eventually development and commercialization.

I like the process outlined by Stanford which teaches a designer’s approach to innovative and strategic thinking, where you start your process by looking at problems through the eyes of the human beings who are facing the problem themselves. It’s the “first principles” approach to innovation thinking. Here’s the process:

Empathize: What this really means is taking the design ethos of human-centered exploration and using it for strategic thinking. You think about who the innovation would ultimately serve. In the case of product design you think about what problems your user has, what they need solved, and how they would use a tool intuitively.

There’s no one size fits all approach to innovation and therefore innovation measurement. It has to be a mix of hard numbers and more qualitative measures that must align with your company’s greater business goals. There are a few basic things that all innovation requires though. Innovation requires planning. It requires measurement. And it requires failure. Failure leads to learning. There is no success in innovation without learning and responsiveness to feedback. From there, comes growth.

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How to measure

success of innovation?

The question of what success means in innovation is one of enormous complexity. Suffice it to say that there are as many concepts and definitions of success as there are government

agencies and managers in the global universe of competing companies. Many measures of the successful innovations seen in management and research literature are simply not measurable. And therein lays a major problem. Liberty global have a whole range of soft and loose

measures for determining successful innovation. Many of these measures have been used widely in government funding of innovation, and frequently without any concern for what they mean conceptually or with any means of actually measuring them. Some examples of commonly seen “success concepts” are:

• Commercialization

• Market introduction

• Bundling or integration into a product or service

• Export to some market

• Purchase by a particular customer

• Generation of some revenue dollars

• A successful application of the technology in the sense that it physically works

• Formation of a “company” based on the innovation

11.1 Value- creation

Value -creation occupies is a must to “success” metrics. To be successful, an innovation must clearly create differentiated value for the sets of buyers involved. However, the problem is that creating value for customers can cause or be accompanied by huge cash losses for the

company involved.

From the customer’s perspective, assessing value is a pretty straightforward task. What he or she gains must exceed the costs involved in cash and effort required to buy the product. Value comes in both tangible and intangible forms. The first-named is more readily apparent and relates to product performance. To create value, the product purchased must function as

promised. Greater complexity is inherent where intangible value is concerned. This value form is generated through product attributes connected with such as emotions and culture.

Liberty Global has to combine technical solutions into marketable products for our consumers. This process is constant discussion in our company.

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11.2 Liberty Global’s goal

In order to understand how to innovate more effectively, to determine what to measure, it is necessary to consider several aspects of Innovation:

• What outcome Liberty global want, e.g. what Innovation means to our customers • Where Liberty global must change our Innovation Process to achieve this sought-for

Innovation

• How to measure that Liberty global are creating increasing value from Innovation • What is the maturity of our Innovation management and how can Liberty global

develop this?

11.3 Measurements of success within Liberty global

Which measure(s) have the strongest correlation or contribution to the intended results? Over which measures do you have the most influence? Which measures capture desired behaviour changes? Is the data accessible; is there ease of collection and use? Are you starting from where you are, with what you have? You can add measure complexity later. Can the measure be used as a drill-down measure from Tier 1 to Tier 2? Can Liberty global establish

meaningful targets (and thresholds) for this measure? All above questions are to be answered for new ideas.

In practical ways within my team innovation is judge on: 1. Increased number of new ideas

2. Improved quality of ideas

3. More efficient implementation of quality ideas

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Each month Liberty Global prepares a (financial) statement of each division in which they give information about this model. For me personally this helped me in getting more insight in Liberty global way of thinking and how marketing looks at our technical innovations.

11.4 My advise

To my opinion measurements of innovation should be an open discussion and to my surprise Liberty global has not got a mission.

The rising in importance as drivers of innovation and growth in the digital economy are changing and include content rights, software platforms, navigation services and consumer data. Access to these assets is already critical for large segments of the growing digital economy and will become even more so. As incorporated by Facebook, Google and Amazon. For a discussion on openness in the context of innovation a view assets along the entire digital value chain and their openness levels is required – a value chain perspective. Liberty global does not add content to her product (exception being Ziggo Sports).

By taking this approach, it becomes evident that the telecommunications and media industry is built on different openness levels which reflect the strategic positions that the prevalent

business models have built up around their key assets for value creation. Like facebook, google and amazon; Apple is a very closed company)

Openness shifts are reflected in three key “strategic battles” that are having a impact on the entire industry.

a. The battle for content navigation, which will be the primary gateway for consumers to digital content?

b. The battle for consumer access, what will be the terms of access to consumers over distribution networks?

c. The battle for consumer data, who will control the rich consumer data and monetise it through advertising and commerce?

These battles are being waged on different terms than in the past, as the services involved have become global in scale. Those networks, in turn, are facing competition from other

infrastructure players as well as new ecosystems (uber, airbnb) around devices, over-the-top platforms and cloud-based environments.

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12

Liberty Global

Management view on innovation?

Technology and innovation have always been at the heart of what Liberty global does. Management is ready for the next challenge – to transform the way Liberty Global innovate, so that they can spark a new generation of technologies that bring meaningful experiences to their customers and enable them to reap greater opportunities in the digital world. It is an exciting journey and together they can make it happen.

Liberty Global continuous focus is on business strategy and goals, and importantly have a clear vision of where the company is going and they knew that the best technology can deliver success to achieve profitable growth.

Liberty Global had a lots of issues over a period of time, examples are; • Senior Management faces strong incentives to focus on short term • Innovation activities was highly variable and difficult to plan and predict

• Managers didn’t know How to develop breakthrough products, Services or businesses. • Organisational incentives encouraged incremental changes but discouraged risk

taking, experimentation and change

• Core Challenge : was the ability to manage uncertainty is fundamental to innovation. • Innovation capacity was limited by internal resources

• Complexity – Products, Processes and Customer experience (that destroy values) Apart from all above issues there are other major obstacles to Innovation had took place within Liberty Global.

• Long development times • Lack of coordination

• Risk averse culture (now it is diverse culture) • Limited customer insight

• Poor idea selection

• Inadequate measurement tools

Keeping up with the relentless pace of change in the Technology industry is a daily challenge for modern tech companies. The key to long-term success lies in the ability to understand change almost before it occurs and seize the opportunity to shape evolving technologies. Tech companies often gain competitive advantage by causing market disruption through their ability to understand and act on technology trends. Like waves in the ocean, it’s much easier to ride these trends if you can see them coming and read them right. (But of course, true

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Innovation is the important parameter that is shaping most of the corporate Life today. To become more competitive in the global marketplace, Liberty Global and I would say most of the organisations need to be driving more innovation in their

1. Products 2. Services

These must be rapid and need to be cost-effective. Liberty Global CEO Mike Fries and CTO Balan Nair knew that they must be focused on growth and they expect Technology is the only enabler of Innovation. These days most of the CEO’s and probably CIO’s are looking to use Technology to gain both efficiencies and differentiation simultaneously and lead to

competitive advantage and for these two, and Technology is one way of Capturing both. Innovation should manifest itself in multiple ways

• Whether in a technology change that determines the products and services Liberty Global delivers it. Or

• A business model change that the value Liberty Global delivers it.

Question: For a company of this size and breadth of Liberty Global, how do you create

cross-divisional collaboration and sharing of ideas to help fuel innovation ? (Explained in chapter 13)

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13

How is innovation

organized in Liberty Global?

Upper management (CEO Mike Fries /CTO Balan Nair specifically) develops an objective methodology, so that alternate capital projects can be evaluated on a reasonable basis. The entire organization is used as a resource by considering both quantitative and qualitative issues.

Marketing provides data on sales trends, new demand and opportunities for new products. Managers at every level should be identifying resources that are available to

upper-management that may lead to the use of existing facilities to resolve the need/take advantage of the opportunity. They should also be communicating any needs they/their departments or divisions have that should be part of the capital decision including identifying the target cost of capital, the evaluation of start-up costs and the calculation of cash flows for those projects chosen for evaluation purposes to maximize its returns/benefits from any capital projects undertaken.

Liberty Global always keep in mind for “Payback period” (time required for the amount invested in an asset to be repaid by the net cash outflow generated by the asset) and focused on shorter payback period to generate more cash flows on operations after payback period is over. Instead, the company's financial analyst runs the calculation year by year, deducting the cash flows in each successive year from the remaining investment.

One of the example for the results of this calculation is for CMTS units (Cable modem termination system) in 5 years are :

Year Generated Cash Flow Net Invested Cash

0 -$1,500,000

1 +$250,000 -1,250,000

2 550,000 -700,000

3 700,000 0

The profits starts at the year 4 onwards which is not a bad idea. An investment with a shorter payback period is considered to be better, since the investor's initial outlay is at risk for a shorter period of time.

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13.1 Examples of Liberty Global search for innovations

1. Spark–Liberty Global internal forum

Spark program offers an online platform for employees to share, evaluate and implement ideas. The aim of spark is to embed a culture of innovation and knowledge sharing across the business and also to offer innovation support to the entire business, and to provide a central hub to monitor and manage all ideas and metrics. However, there are offline activities too, such as brainstorming workshops and the Matchbox program.

The spark platform was initially launched in 2011 to 1500 employees in the Netherlands. Later it got expanded to four other countries and by the end of 2012 Liberty Global had several innovation platforms running in isolation in different business units.

The idea management systems had high participation and a regular stream of new ideas, proving that the interest and engagement was already there. But ideas were not aligned with company strategy, and were not sought for a specific challenge or timeframe, resulting in a large volume of ideas with no connection to business needs, and no clear ownership. Liberty Global people struggled to find ownership for implementation. Idea also lacked a standardise process to provide a consistent way to handle them. To complicate matters further different- and very basic- platforms were used, preventing international co-operation and idea sharing.

General resources – The central park team consists of two full-tie employees in Amsterdam. An innovation network manager is appointed in each country. Innovation network manager spend a portion of their regular day job on facilitating and marketing idea campaigns.

Spark Innovation Lab – For the more disruptive innovation, Liberty Global works together with Technical University in Delft. Master’s students (offered by TU Delft: Integrated product design(IPD),Design for interaction(DFI),Strategic product design(SPD)) work for 20 Liberty weeks in the spark innovation Lab- an open and inspirational space at a central location in the headquarters in Amsterdam. The assignment the students work on is based on a future need from the business, and results in the presentation of a validated prototype. Besides the value of the lab helps to promote and embed the notion of spark within the company, and provides a collaborative space for anybody to work on innovation.

The spark team arranges for five students to spend six months working at Liberty Global, where 75% of their time is allocated to a business assignment(product concept design), and 25% on a spark assignment.

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2. Venture Capital

Liberty Global Ventures is a global investment fund owned by Liberty Global, the largest cable company, with market-leading operations across 14 countries. Their existing portfolio consists of companies in the content, technology, internet and distribution space. These investments are managed by a dedicated team of professionals located in London, Denver and Silicone Valley and Amsterdam.

Strategy – Liberty Global will invest in early stage(pre-revenue) to late stage companies with the deal size from US$2 to US$20 Million and these investments are scalable across international markets and leverage Liberty Global’s operating resources to drive superior investment returns.

Value Proposition - Liberty Global Ventures introduces all their portfolio companies through an established on-boarding process into their core operations in Europe. A dedicated executive venture

- support in Europe helps expedite introductions - setup proof of concepts

- perform market tests

- Purchase orders and other such facilities as needed to make the portfolio company successful.

Liberty Global Ventures main focus is on

A. Technology

o Infrastructure and communication o Consumer experience

o Enterprise

o Advance Advertising

o Content Delivery and Management

o Customer Management

B. Content

o Linear and Non-Linear

C. Technology

o Emerging Markets : technology agnostic

This helps Liberty Global Inc. to achieve international growth by having access to capital with their operating resources.

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3. Techstars-Incubators

Liberty Global has joined Techstars (global ecosystem that helps entrepreneurs build great businesses) to strengthen and support start-up communities.

Virgin Media accelerated, powered by Techstarts, a brand new program to support innovative digital start-ups.The overall idea is to help accelerating the pace of innovation by strengthening the path for entrepreneurs, providing support for entrepreneurial communities, and helping to grow the worldwide entrepreneurial ecosystem.

Virgin Media Accelerator Program is a three-month mentoring program supporting companies working on innovative ideas relating to the digital world. The launch of this new program further extends Liberty Global’s support of digital start-ups and complements the existing programs supported by Liberty Global in two of its key markets:

o Telenet Kickstart, powered by Idea labs accelerator in Belgium o Virgin Media’s Pitch to Rich program in the UK.

4. External Research

Liberty Global continuously focusing on how some companies and specially competitors/firms are improving their innovation capabilities through a variety of technology transfer and knowledge sharing activities.

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14

Liberty Global Culture

on innovation

Liberty global purpose is to give people around the world, at the core of who they are, this is what they strive to achieve both externally with their customers and internally with their employees;

- The freedom to connect - The freedom to converse - The freedom to work

- The freedom to be entertained.

Liberty Global actively measure engagement among their vibrant workforce of 37000 employees, working across 14 countries, in a remarkably diverse culture of over 80 nationalities.

Employee engagement is an integral part of how Liberty Global build culture in order to win with their people and their customers. Liberty global does a number of things to actively foster a culture that empowers people to grow and achieve their highest potential.

14.1 Zoom

is the employee engagement tool, serves as a powerful measurement tool for them to hone in on their strength and areas of improvement as an organisation. They have, of course, also identified opportunities for improvement. For instance, Zoom told them that employees are concerned about complex structures and processes in the organization, which can slow

decision-making. They also indicated a desire for more interaction with and clarity from senior leaders regarding the strategic direction of the company. This is invaluable feedback that Liberty global need to take on board to boost engagement and realize our growth ambitions. Among the more than 37,000 employees across 164 countries who participated, they achieved a global engagement score of 60%, an impressive six percentage points above Aon Hewitt’s global benchmark. Liberty Global employees expressed pride in their local brands,

appreciation for their diverse and inclusive environment, conveyed a strong relationship with their line managers and sufficient influence and involvement in decisions about their work. These indicators tell them that they are making good progress in developing a culture that empowers people to grow and achieve their highest potential which directly affects company growth.

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15

Strategy to use

innovation in the future?

Liberty Global management team has a clear picture in their strategy towards Innovation from the beginning and continuous focuses on Strategic innovation.

Liberty Global plans on three-year development cycles and over the next three years it’s all about harmonisation, both with platforms and back offices. Liberty has a programme in place to harmonise all back offices across Europe, which play a big part of what the cable company calls the Liberty Go strategic initiative.

15.1 Customer Centricity

Liberty global commitment is to be the leader in every community they server and to provide an exceptional experience to their customers by offering innovating solutions to both new and existing customers, by having a sincere understanding of customer wants and needs.

Liberty Global as a cable company has a strategy working towards the following six big areas to disrupt the market and get the competitive advantage in a very early stage.

1. Internet of things ( IoT)

2. Mobile 5G and Next generation Wireless 3. Artificial Intelligence (AI )

4. Machine Learning (used to create a better WiFi experience) 5. Cybersecurity

6. Big Data

Internet of things ( IoT) The point in time when more devices or objects were connected to the internet than people.

With the Internet of things ( IoT), Every Telco wants to - Receive more data

- Want to control - Want to automate

- Want to make data transfer faster SensorsLocal ProcessingLocal

StorageNetworkInternetCloud ProcessingCloud Storage The Internet of things ( IoT) is changing much of the world Liberty global live in, the way Liberty global drive, how Liberty global make purchases, and even how Liberty global get energy to our home. Sophisticated chips are embedded in the physical things

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that surround us. Each transmitting valuable data, data that better understand how these things work and work together. But how exactly all these devices share such large quantities of data and how Liberty global put that information to work, whether Liberty global are improving the production of factory, giving city residence a real time update on where to park, or monitoring a personal health, it’s a common Internet of things (IoT) platform that brings diverse information together, and provides the common language for the devices and apps to communicate with each other. The process start with devices themselves which securely

communicate with Internet of things platform, this platform integrate the data from many devices and apply analytics to share most valuable data with application that address industry specific needs.

Let’s start with a simple example, a Car, after taking a long trip, check engine light is come ON, they guy who is driving a car knows he has to take the car to a Mechanic but doesn’t know whether its minor or major issue with an immediate attention. As it turns out, the sensors that triggers the check engine light, monitor the pressure and break line. This sensor is one of many monitoring processes throughout the car which are constantly communicating each other and a component in the car called diagnostic bus

gathers the data from all these sensors and passes to the gateway in the car. The gateway integrate and source the data from the sensors and this way only the most relevant and diagnostic information will be transmitted to the manufacturers platform. But before sending organised data, the cars gateway and cars platform must register with each other and confirm a secure communication .The platform is constantly gathering and storing 1000’s bits of

information from a car and 100s and 1000s of cars like him, building a historical record in a secure database, the manufacturer added rules and logic to the platform ,so when that guy car sense a signal that breaks through his job recommended level apart from his triggers and alerts in a car, the manufacturer also uses the platform to create and manage applications that are solve specific issues. In this case the manufacturer can deploy an application on the platform called the asset management system. This application sees all of their customers cars on the road as well as other parts in ware houses. It uses data from the guy car , offers him an

appointment time to service his car, direction to the nearest certified dealer and coupon for the service and the app ensure that the guy breaks are cover under warranty that the correct

replacement part are ordered and sent to the dealership so that it is ready when he arrives.

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Mobile 5G The next evolution of wireless is coming in 2020, and it's going to

change the world when it launches by all the Telco’s. Here's everything should know about 5G which are

- much more than higher peak rates

- it needs to enable new classes of services - connect new devices and industries

- and empower new user experiences while fully leveraging 4G investments.

- The envisioned unified platform needs to support all spectrum, below 6 GHz as well as above 6 GHz and mmWave.

- 66 times faster than 4G

- Going to helps for Internet of Things (IoT)

Artificial Intelligence (AI )

The difference between the way of working Liberty global know today and the Artificial Intelligence way of working in the (near) future will be significant. Programs now are written and needs to be changed if new requirements come in, in the AI, programs will adapt to the new situation and will learn automatically and change the program.

So instead of adding functional additions manually, these will be added automatically by the AI. Today (Technology) chips are getting more sophisticated every day. It is no longer the

technology that is not able to keep up with the changes, but it is the people that needs to keep up with the technology development. “Old fashion” programming will be replaced by new way of programming and people will need to be educated to this new way of working.

It will in the meantime start to deploy RDK-B devices as part of its platform harmonisation. Harmonisation and virtualisation are its big developments at present.

Machine learning is also being used to create a better WiFi experience, some of the

innovations taking place in the WiFi space, using techniques like machine learning to improve the overall wireless experience in the home. This also extends to the point of sale (PoS), understanding what the best connectivity package is – eg multiple access points or extenders – based on data and intelligence, with some machine learning. This then gives Liberty the ability to simulate what will be a good WiFi quality of experience for a give type of home and get that right at PoS.

Liberty Global plans on three-year development cycles and over the next three years it’s all about harmonisation, both with platforms and back offices. Liberty has a programme in place to harmonise all back offices across Europe, which play a big part of what the cable company calls the Liberty Go strategic initiative.

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The overall investment programme sees three areas of growth: new-builds (encompassing a total of 7m homes over the next 2 and half years), for which the infrastructure RFPs are now closing; organic growth in mobile; and a renewed focus on the business/B2B side.

Liberty Global has invested in software developers, chip makers, advertising, IoT companies, cloud-based companies and others as it looks to a mix of outside partners and in-house expertise to innovate.

Liberty is taking things like its video back office, communications back office and connectivity back offices and largely virtualising those, turning them into a centralised environment that is largely cloud orientated and through which the company has ‘micro-services development capability.

Software defined services, software-defined platforms and software defined networks, which are at a different stage of technology advances software defined networking (SDN) and NFV (network function virtualisation) which is probably the last step Liberty Global will get to. Liberty Global has a vision to beat the competition with continuous innovation (acceptance of Change) on the following

• Continuous product development (Cable modems, Setup Boxes)

 New and enhanced existing products, Solutions and services are just one aspect of innovation

 New features in the box

 New models introduction to the customers

 New content delivery model, integration with Netflix and others

• Managing Product Life cycles (Upgrading Bandwidth, equipment upgrades, changing firmware’s etc)

Innovation is not only important into products but Liberty Global has looked Innovation from all aspects of the business where it is Finance, provision and delivery and may be due to all of these , Liberty Global is very successful and profit oriented Cable company.

Liberty Global should investigate and plan to offer Cloud and XaaS services moving from products to communications-like Amazon, Microsoft is doing but a bit in different ways to be innovating and beat the competition.

This definitely helping Liberty Global achieving and fulfilling Balance scorecard from Finance, continuous learning, customers satisfaction, internal business processes.

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16

Conclusion

There is no one best strategy for innovation. The need for strategies to look to future

ecosystems of companies and from this to nurture capabilities to allow delivery of innovations to the marketplace. In constructing strategies it is necessary to understand what innovations will be valued in the future and to take action to ensure that the firm possesses the capabilities to deliver on these.

Leaders must start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over

customers.My conclusion is therefore divided into several parts: 16.1 Management

While senior executives cite innovation as an important driver of growth, few of them explicitly lead and manage it. About one-third say that they manage innovation on an ad hoc basis when necessary. Another third manage innovation as part of the senior-leadership team's agenda. How can something be a top priority if it isn't an integrated part of a company's core processes and of the leadership's strategic agenda and—above all—behavior?

16.2 Culture

When innovation occurs in organizations, it becomes embedded. It also becomes an invisible competitive advantage, consistently creating new value for shareholders and also to the organization. It is reflected in how individuals and teams think innovatively as they redefine complex issues, generate new ideas, discover solutions, and mitigate risks. The end result will be that organizations will close their innovation gaps, become able to achieve sustainable customer value and employee engagement, and remain vital into the future.

16.3 Make customer experience plan

The best companies recognize that customers interact with different parts of the organization and across multiple points. They know customers engage with different employees when they make a purchase, when they’re getting service and support, and when they’re talking to billing or accounts. A company must take all of these experiences into account if they want to

create loyal customers. A loyal customers always give feedback on your product and advise for improvement.

16.4 Measure customer experience.

Measure customer experience in a structured manner, helping drive commercial effectiveness as well as operational efficiencies. Use Net Promotor Score(NPS) to measure brand, product and service insights to show how customers experience our products and services at each touch point. Make NPS scores are part of the performance management process and innovation!

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16.5 Action plan

They some steps to make innovation more visible:

a. Define innovation that drives growth and helps meet strategic objectives. When senior executives ask for substantial innovation in the gathering of consumer insights, the delivery of services, or the customer experience, for example, they communicate to employees the type of innovation they expect. In the absence of such direction, employees will come back with incremental and often familiar ideas.

b. Innovation should be formal agenda at regular leadership meetings.

We observe this approach among leading innovators. It sends an important signal to employees about the value management attaches to innovation.

c. Set performance metrics and targets for innovation.

Leaders should think about two types of metrics: the financial (such as the percentage of total revenue from new products) and the behavioral. What metrics, for example, would have the greatest effect on how people work? One company required that 20 percent of its revenue come from products launched within the past three years. Another

established targets for potential revenues from new ideas in order to ensure that they would be substantial enough to affect its performance. Leaders can also set metrics to change ingrained behavior, such as the "not invented here" syndrome, by requiring 25 percent of all ideas to come from external sources.

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17

Innovation of 2020:

Power from the Air

Even the smallest Internet-connected devices typically need a battery or power cord. Not for much longer. Technology that lets gadgets work and communicate using only energy

harvested from nearby TV, radio, cell-phone, or Wi-Fi signals is headed toward

commercialization. The University of Washington researchers who developed the technique have demonstrated Internet-connected temperature and motion sensors, and even a camera, powered that way.

Transferring power wirelessly is not a new trick. But getting a device without a conventional power source to communicate is harder, because generating radio signals is very power-intensive and the airwaves harvested from radio, TV, and other telecommunication technologies hold little energy.

Shyamnath Gollakota and his colleague Joshua Smith have proved that weak radio signals can indeed provide all an Internet gadget needs, using a principle called backscattering. Instead of generating original signals, one of their devices selectively reflects incoming radio waves to construct a new signal—a bit like an injured hiker sending an SOS message using the sun and a mirror. A gadget using the technique absorbs some energy from the signal it is modifying to power its own circuits.