faster horses
enterprise innovation s05e03
when you are in a large enterprise, somewhere in between the peak of inflated expectations and trough of disillusionment, heading towards the slope of enlightenment you can very easily replace ‘big data’ in the image below with one of your company’s actual buzz word. not so surprisingly my take is on innovation this time
i am coming from a world of project/product/people management in large enterprises where the call was always around failure is not an option. about 5 years and 3 months ago i have switched that world to failure is the only option, a bit more specifically fast failure is the only option
we established a fintech innovation department that deals with retail digital channels and has great autonomy to explore and define the future of bank-retail customer relationship and consequently our products in this area.
initially we struggled a lot by defining the role of our innovation lab, and soon we got to understood that such a lab might very easily lose focus by working on highest paid person’s pet projects. after several iterations we finally came to our current guideline, that is frankly very simple, our true north is around three words:
do share inspire
we do rapid prototyping, even more pretotyping to validate our concepts’ potential market appeal with the smallest possible investment of our time and money. to do so we use several methods and techniques, most of them are some iterations of human centered design, design thinking and lean enterprise processes
for a long time we existed in a bubble not really opening up. in a huge enterprise one builds protective reflexes very quickly and that can be a major blocker for sharing. we were afraid that some ideas will be shut due to sharing early, sharing without hard evidence on potential, but we forced ourselves to be brave and share both internally and externally. this was very important, from that point on many people realised that we are not only a bunch of weirdos playing all day, rather the catalyst of our future
we think of ourselves as in-house entrepreneurs who need to run in front (and take the bullets sometimes). this means that we need to inspire others to be brave, try new ideas and learn that the only failure is if we don’t build quick feedback loops as our main validation technique. inspiration mainly comes from storytelling, showing our vulnerability, writing personal articles, making great videos of how we work and what can be achieved with very little investment via rapid prototyping
how to collect ideas?
initially we thought that ideas are the most critical elements in innovation, but we have learnt that finding ideas are not that difficult. you can easily come up with a set up where ideas are flowing in naturally. the only trick is that you need to establish a system that empowers you to continuously get real insights from your end users (it implies that you need to be very close to them, that is currently not evident for large enterprises, especially in b2b markets). a few techniques can help if you happen to stuck like brain writing, crazy 8, pretostorming.
once you have a clear vision and a long list of ideas you may face real challenges starting with the validation of the ideas
how to validate?
for validation we had several concepts, several complicated processes and evaluations, but now we use a simple formula we figured out for ourselves and we call it the frustration framework
?#$!
you might guess what the hell it means, but i save you some time with that.
? stands for insights, do you know what is a frustration (or need) of your customer?
# stands for the frequency factor, how often does it happen, once in a lifetime, once in a year, once in a day?
$ would anyone be willing to pay to avoid or contrarily achieve this state?once all these three seem to crack we go for the ! we build a quick and dirty concept and iterate based on the initial feedbacks
there are many other techniques that one might try, we really liked the problem — promise — proof one, but you can easily find tens of them, you only need to carefully pick the right one or even better if you tweak one to your actual context
where is the roi?
this is all nice, but you’d definitely want to ask me about the roi. what is the return of investing in such a team? and without a blink of an eye i would state that roi is the ultimate killer of innovation. you will never be free/encouraged to experiment in unknown areas if you are always considering the price of it. this is very similar to the ancient joke of a cfo whining about the huge investment around trainings
ok, but what are the right metrics then for measuring an innovation lab? how can you be sure whether this really worth it? honestly, you can only hope for. but you can measure a few things, you can showcase your concepts early on to your customers, prospects, analysts and validate their potential way earlier then you could with a classic product. you can collect the ahha moments, you can take away the concerns, so you can reassure/iterate them
posterboys
one more important aspect is the buzz. you can always spend a fortune on marketing and try to measure the effect, but that is not really straightforward with long lasting sales cycles on b2b markets. you can do direct sales supporting campaigns and you can do brand/image building that has a far more implicit and long lasting effect.
i consider an innovation lab (done right) the best implementation of the later. what do you think, would you buy a model 3 pushed down on your throat in classic ads or you are rather sold by an orbiting roadster?
we always say that are greatest value is not only defining the future of our products. our unique value is showing the future to our prospects and telling them not to buy our current product, rather buy into the future. this puts us on a different playgrounds and positions the innovation guys as poster boys of the company
in-house or outsource?
more and more frequently i get the question what is the better strategy in-house or external sources of innovation? i like to reply with a question instead of a simple answer: can you live on an exoskeleton? can you rely on someone else when you are about to win? for me this is a no brainer, innovation should be every company’s ultimate source of success therefore you can never outsource it. it does not mean that you cannot partner, you definitely should, but everything that is strategic must remain in house
there are a lot of other aspects, i will cover a few more in the next articles soon and really looking for your thoughts, ideas, comments for that
my bottom line is that innovation cannot be said, only done. if it is a pr gag you should know that you started the joke, but the joke is on you and you’d better get on henry’s faster horses and ride away
