How to nurture an innovation engine

I love art and craft. John Ruskin, the Victorian art critic and philanthropist, founder of the Ruskin School of Art in Oxford, famously said:

“do not think that you can learn drawing, any more than a new language, without some hard and disagreeable labour. But do not, on the other hand, if you are ready and willing to pay this price, fear that you may be unable to get on for want of special talent”

In other words, you can learn this skill if you are willing to put in the work. He was also scathing about how he saw art being taught:

“The kind of drawing which is taught, or supposed to be taught, in our schools in a term or two, perhaps at the rate of an hour’s practice a week, is not drawing at all. It is only the performance of a few dextrous evolutions on paper with a black-lead pencil; profitless alike to performer and beholder, unless as a matter of vanity.”

There are some striking parallels between Ruskin’s words and my experience in corporate innovation:

Much of what passes for innovation in corporations is ‘performance’ and ‘profitless’; great innovation comes not out of the blue through innate genius but after ‘hard and disagreeable labour’. And like art, I’ve found innovation is more nurture than nature.

I have previously written about bp’s scale-up organisation, ‘Launchpad’, designed to accelerate our journey to a net-zero carbon future. We are now two years into the Launchpad journey — in that time, we have taken on five new companies and built a team of forty scale-up professionals. Launchpad is now further integrated into bp’s innovation ecosystem. We work much closer with our digital and venture teams and bp has also established a new incubation organisation — you could say we’ve done some of the hard labour.

In writing this piece, I want to reflect on nurturing innovation, detailing how we do this through a repeatable and teachable ‘scale up’ formula in Launchpad — and outline three key learnings from the past two years.

1. It’s about micro-lessons

It’s a cliché to talk about building a learning culture to foster innovation. But I want to explain how learning works best in an environment like Launchpad, where we are pioneering more often than drawing from existing blueprints.

We’ve found that culture is critical; it must foster continuous learning opportunities for individuals and teams on many different timeframes — daily, weekly, quarterly. At Launchpad, our people have been there and done it — at Shazam, Google, Groupon and others; they’ve learnt ‘what good looks like’ and can help portfolio companies learn fast at the granular level when they have questions, like “what sales incentive program do I need?”; “how should I price this product based on the customer feedback?”; when should I hire a CTO..?”

Crucially, when we go through these processes with our portfolio, we capture what we’ve learned and we share it. We recently created a new as-a-service strategy for one of our companies and, in the interest of learning, have shared the execution example that same week with other portfolio businesses.

While we take what’s relevant from venture capital and private equity, we don’t use their playbooks or frameworks wholesale. Instead, we work with our companies to create tailored, ambitious growth plans that are adaptable as we learn the micro-lessons along the way.

2. Create flow at pace

Large corporates, in theory, can operate an end-to-end innovation engine, powering the entire journey from invention to business maturity. In reality, corporates often have a series of promising components that are disconnected, for example, ‘R&D’, ‘accelerators’, or ‘corporate venture capital’.

To unlock exponential value growth, we are breaking open these compartments, integrating hypothesis testing, ideation, venture building and business scaling. Linking this innovation engine with the power of incumbent businesses, outside investors and partners can dramatically accelerate a business.

For example, we originally invested in Fotech, a leader in real-time fibre-optic sensing through our venture fund before seeing it as a natural fit for Launchpad and taking a 100% stake. We are using our incubation capability to test and develop Fotech’s smart city product offering while at the same time giving Fotech access to customers inside bp for its more established solutions.

This frictionless flow of innovation and value growth is only possible because we brought teams together who share common processes and incentives. I believe this integrated approach is the beginning of a new innovation model.

3. Manage for uncertainty

The processes, governance and rewards in a large corporation are geared towards maximising shareholder return which naturally and appropriately protects incumbent assets against downside risk. When these companies need to pivot their products and portfolio while at the same time running the ‘core’ business, ‘step-out’ innovation at scale becomes a necessity — this is where bp finds itself.

Running an innovation engine in this context requires a focus on navigating uncertainty as new technologies, business models and markets are rapidly explored. This means designing the processes and environment around businesses with no incumbency; businesses vying to be ‘first to market’.

At Launchpad, we have therefore been very deliberate about maintaining the best of bp while also doing some things differently. We needed to build and reward a culture of extremely rapid, guided experimentation that embraces the need to constantly adapt in the face of learning. In other words, it’s ok to change your mind, change your team and change your product. And do it often because information is constantly changing.

In conclusion…

At bp, we are starting to run our innovation engine, fuelled by diverse experience, clear purpose and, most of all, a rapid learning culture. It’s early days for us and I’ll be writing more as we go along, but I really believe we are on to something that it is repeatable, teachable and valuable — just like the model Ruskin adopted. The big difference is that I’m having fun! — perhaps hard labour is not so disagreeable after all.