The Explore: an approach to generate new business concepts — lessons learned about choosing the right team, environment, and topic
By Suze Melissant
In my previous article, the ‘Explore’ was explained, a process that is used at ABN AMRO to come up with new business concepts. In this article, I elaborate on lessons learned and prerequisites that should be in place to improve the chances of success for an Explore. Which are: composing the right team, ensuring the right environment to diverge and converge, and choosing a strategically relevant and challenging-enough topic. Read more below.
Lessons learned about the ideal circumstances for an Explore
The past years we have run several Explores that were all ran in slightly different circumstances which allowed us to learn about the ideal set-up that will at least increase the chance to come up with a great new business concept. In summary, this comes down to the following;
- Team: The right team exists of 2–4 team members, that can work with full dedication.
- Environment: Ensuring the right environment to diverge and converge is important. It should be one where the team works closely together and preferably at least twice a week in real life to discuss the project. Also, the team needs to receive trust and support to be able to work autonomously.
- Topic: Choosing a strategically relevant and challenging-enough topic. A strategically relevant topic is one that is not too broad or too narrow and is strongly supported by senior management.
Strategy & Innovation is a self-containted department that directly reports to the CEO. Furthermore, ABN AMRO is comprised of the following client units: Personal & Business Banking, Wealth Management, and Corporate banking to which we refer to as ‘the business’ in this article. In recent years, our initiatives have been developed separately from the business. As of now, the Explore will be executed in collaboration with the business.
Team: Diversity and dedication
One of the most important success factors for every (innovation) project is the team. A best practice is to compose a multi-disciplinary and diverse team of 2–4 people who can work on the project with full dedication. Pijl et al. (2016) argue that a team should be comprised of people with varying points of view, and skills, who are strong in pattern recognition, both micro and macro. To illustrate why a team should not be set up with people that are too similar, Pijl et al. use the analogy: “You will not win a soccer match with 11 strikers.” There should, additionally, be an extensive network to tap into.
Especially in the generation of new ideas, familiarity with design tools and methods helps to improve and accelerate the innovation process. Hence, at least one of the team members should be familiar with the Explore and the fuzzy front-end (see image below) of an innovation project. The other team members can be chosen according to the scope and availability. Speed and momentum must be captured in the process by allowing the team members to work on the Explore almost full-time. To cite Blend and Osterwalder (2019): “Multitasking across several projects will silently kill any progress.” Adding to that, do not put a team together by looking solely at how many FTE is needed. Meaning, if 1.5 FTE* is needed, do not fill the team with 6 people who go in and out of the Explore and only work on it briefly.
*FTE stands for ‘Full-time equivalent’. If a project requires 1 FTE that is filled by one person, that means that this person spends all his time on that project.
An example of a team set-up in our case would consist of:
- An Innovation Consultant that facilitates the process and is also a full-time team member during the Explore. Innovation Consultants help initiatives with their innovation process and have a lot of knowledge on what tools, templates, and steps are useful.
- An Innovation Manager who can be the project lead and is responsible for further developing the initiative after the Explore. An innovation manager has a background in innovation and often becomes the leader of the initiative.
- An intrapreneur. An intrapreneur is someone who comes from the business and spends 18 months at our department and brings in knowledge from the business and works full-time on one initiative.
- A representative of the business. Since we will now do Explores in collaboration with the business, we need someone from the business that is actively engaged in the process. This is especially important for choosing the right topic and the first research part of the process.
Environment: Facilitating informal synthesis and receiving trust and support
During Covid, we have experienced that not being able to physically work together has been a great challenge for the Explore process. We missed a physical room with whiteboards and post-its where the team can get into heated discussions, make tough decisions, and pivot if needed. Often epiphanies, key insights, and original ideas come to mind at random moments, when it’s not on the agenda. This unplanned, informal synthesis where you talk freely without an agenda is difficult to imitate when working remotely. To a great extent, working remotely has in fact brought many advantages. It is much easier for a team to meet, and online whiteboard environments such as FigJam, Miro, or Mural are great for creative sessions.
Attention must be paid though to not only recreate the meetings and sessions in an online way, but also the informal moments such as during a coffee or lunch break where you freely discuss the project and often come to rich insights. It is for this reason that we prefer a hybrid version in which we see each other at least twice a week during our so-called ‘heads down time’. The heads-down time is really meant for creative sessions and coming to new insights together.
Not only the physical environment should be considered, but also the environment in terms of trust and support that a team receives. This must come from both our Strategy & Innovation department and the business. Support comes from the right kind of leadership where someone feels fully responsible for the project’s success. Someone who ensures that the way is cleared for the team to work autonomously, who links them to the right people, and does the stakeholder management at a higher level. Last, the right environment also means providing a budget to the team allowing them to execute certain experiments such as scouting the right respondents via an agency.
Topic: A strategic balancing act to come up with the right scope
When the initiatives resulting from Explores are too far off from the current operations of the business, they become difficult to adopt. Hence, we now do Explores in collaboration with the business. To arrive at a good subject, we look for the sweet spot of what is a priority for the respective business unit but is not yet picked up by themselves. As an ‘innovation hub’, we strive to establish products and services that are new — rather than an addition to — the already existing products and services of the company. That’s why our department is set up at arm’s length from the business units. This way we keep aligned with the business while having the freedom to explore services that go beyond the usual products and services that banks offer.
While we used to come up with topics to explore ourselves, we currently do this together with the business. Therefore, both the goals and objectives of our department, as well as those of the respective business unit should be considered. After all, agreements must be met already at this stage that once an initiative is developed within the innovation department, resources will be made available to pick it up once it returns to the respective business unit. For this phase, we now took several weeks and both departments were involved in coming up with a list of different scopes, and reasons why those were interesting.
The topic itself needs to have strategic relevance for the company and stretch the business without losing them. However, when the innovation department comes up with something that is very much in line with an existing product, you end up innovating on a product that you don’t ‘own’.
Besides, the scope itself must be specific. A good example would be: ‘Helping non-tech savvy retail customers keep their important documents and information safely online’. This entails a specific target group and a challenge they are facing. Something that would be too broad for an Explore would be: ‘Can we play a role in the mobility ecosystem.’ This makes it much more difficult to discover what challenges certain groups are facing, let alone come up with a desired product/service to offer. This scope would be more suitable for a strategic project out of which scope for an Explore could arise.
To conclude: keep exploring the Explore
We have learned a lot about running Explores but are also still discovering the golden formula to continuously generate new business concepts that mature into successful initiatives. There are many variables that influence the process and progress that we can never all control. This article only touches upon a few of these variables that we learned to improve the chances of success: composing the right team, ensuring the right environment to diverge and converge, and choosing a strategically relevant and challenging-enough topic. At this moment we have started an Explore that considers all these conditions. Time will tell if these will be sufficient, or if another article needs to be written with new and adjusted lessons learned.
About the author:
In September 2020 I started as a graduate student from the master Strategic Product Design from the TU Delft to research the process of coming up with new business concepts within a corporate environment. Within the Strategy & Innovation department of ABN AMRO, this phase is called ‘The Explore’. I was positively surprised to see designers, innovators, and people from all kinds of backgrounds work together in a creative and innovative way in the relatively rigid environment that banks are known for. Since September 2021 I have taken the role of Innovation Consultant with a specific focus on the Explore and I am pleased to now be part of this team. I am very motivated to continue researching and improving the way we generate new business concepts and help shape the bank of the future!
Sources:
- Bland, D. J., & Osterwalder, A. (2019). Testing Business Ideas: A Field Guide for Rapid Experimentation (The Strategyzer series) (1st ed.). Wiley.
- Pijl, V. P., Lokitz, J., Solomon, L. K., Pluijm, V. E., & Lieshout, V. M. (2016). Design a Better Business: New Tools, Skills, and Mindset for Strategy and Innovation (1st ed.). Wiley.
